Omega 125 (2024) 103041

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Omega
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Integrating time-temperature dependent deterioration in the economic

order quantity model for perishable products in multi-echelon
supply chains✰
G.D.H. Claassen a, *, P. Kirst a, A. Thai Thi Van a, J.C.M.A. Snels b, X. Guo b, P. van Beek a
a
Operations Research and Logistics group, Wageningen University, The Netherlands
b
Wageningen Food & Biobased Research, The Netherlands

A R T I C L E I N F O A B S T R A C T

Keywords: This paper focuses on a novel approach for managing cold chains of highly perishable products. We extend the
Economic Order Quantity classical and frequently applied economic order quantity model (EOQ) for its application in multi-echelon supply
EOQ chains for highly perishable products. Literature shows that order-level inventory systems for perishable items
Multi-echelon
are commonly modelled by parametric approaches e.g., a time-dependent (Weibull) deterioration rate. However,
Cold chain
Perishable products
the deterioration of perishable fresh products is a complex process, heavily influenced by product dependent
characteristics and, crucially, depending on environmental conditions. We take both time-temperature-
dependent deterioration, and the multi-echelon aspect of cold chains into account and integrate both aspects
into a generically applicable EOQ-based methodology. We demonstrate the concept from a real-life case study for
cold chain management in floriculture. Two commonly used multi-echelon supply chains are considered and
compared. The results show that the optimal order levels in different echelons of the supply chains are sub­
stantially different. In addition to the sojourn time, the temperature has a major impact on order levels, the total
supply chain costs, and the remaining shelf-life at the retail level. We demonstrate that the proposed concept for
extending the EOQ-based model to time- and temperature-dependent deterioration can be generalized and
applied to other specific causes of product-dependent deterioration.

1. Introduction income-dependent demand and price-dependent supply [28].

Since Harris [23] introduced the Economic Order Quantity model
(EOQ) in 1913, the development of inventory control received great
interest in both academia and practice. Even a century after its creation,
Andriolo et al. [3] conclude in their survey and analysis of EOQ litera­
ture that EOQ inventory control models are still attractive and widely
accepted by industries, particularly due to their succinctness, simplicity,
elegance, and effectiveness. Meanwhile, a vast amount of literature has
been published on inventory lot sizing, foremost driven on either
addressing the underlying assumptions or, more recently, on extending
the valuable concept to new aspects and circumstances in practice like
for instance introducing a freshness-dependent selling price [15],
introducing compound interest [8], the effects of discount policies [21,
48], EOQ-based inventory control of two products with demand sub­
stitution [47], or considering an EOQ model with customer’s
One of its important extensions refers to the control and maintenance
of inventories for deteriorating items. Goyal and Giri [19] emphasize the
distinction between decaying and deteriorating products. The main
distinction between both categories refers to the usable lifetime.
Decaying products lose their value over time and may become obsolete,
but they are not destroyed (e.g., products from the discrete part industry
like mobile phones, or style goods in fashion merchandizing) while
deteriorating products have a maximum useable lifetime or “shelf-life”.
Agro products like fish, meat, milk, green vegetables, fruits, or cut
flowers typically belong to the class of deteriorating products that
physically decay and are irreversibly destroyed over time.
Fresh products need to be kept in specific atmospheric conditions
along the entire supply chain in which time and temperature are the
most important quality parameters [35,36]. Consequently, management
systems for fresh products must be based on time-temperature

✰
Area - Supply Chain Management. This manuscript was processed by Associate Editor Wilco van den Heuvel.
* Corresponding author.
E-mail address: frits.claassen@wur.nl (G.D.H. Claassen).

https://doi.org/10.1016/j.omega.2024.103041
Received 24 March 2023; Accepted 25 January 2024
Available online 1 February 2024
0305-0483/© 2024 The Author(s). Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
G.D.H. Claassen et al.
measurements and require a holistic approach in which decisions of
stakeholders at different echelons are carefully coordinated [16,36,46].
Mercier et al. [36] state that management systems based on time­
–temperature measurements are very limited, partly due to the inaccu­
racy of shelf-life estimates from temperature measurements.
Research has shown that integrated and collaborative decisions
across subsequent links in supply chains translate into greater joint
benefits for all supply chain actors compared to scenarios where each
echelon makes individual decisions [11,40]. However, several review
papers conclude that holistic approaches for the design and manage­
ment of fresh product supply chains are still scarce [1,36,46,50]. Duong
et al. [16] focus specifically on inventory management for perishable
products and confirm the lack of holistic approaches. The authors
conclude that single-echelon inventory papers are reaching a saturation
point and research attention should increasingly focus on multi-echelon
models.
Contemporary consumers expect a wide variety of high-quality and
“ripe on arrival” fresh products with a long shelf-life to be available all
year round [45,46,55]. This trend in (foremost) developed countries has
led to an ever-widening array of fresh produce, increased the demand for
those products, encouraged global competition, and induced the tran­
sition from locally to globally oriented, long-distance, multi-echelon
supply chains [1,46,55]. As a consequence, the design and configuration
of the related supply chain networks [17,18] make controlled storage
conditions including the efficient management of transportation, dis­
tribution, and inventory management critical [46].
This study focuses specifically on EOQ-based inventory control for
highly perishable fresh products in multi-echelon supply chains. In
general, these chains may comprise several supply chain actors like
growers, auctions, wholesalers, importers and exporters, retailers, and
shops. Particularly for perishable products, the post-harvest sojourn
time and temperature conditions during (intermediate) storage and
transportation are extremely important for product deterioration. Many
highly perishable products are still alive after harvesting and respiration
continues in a supply chain (e.g., fresh vegetables, fruits, or flowers).
Other products foremost suffer from fungal, microbial and/or enzymatic
product deterioration. Either way, time-temperature controlled storage
and transportation conditions during the entire supply chain have a
significant impact on the rate of deterioration for highly perishable
products.
Commonly, there are two ways (including all relevant combinations)
to manage the quality of fresh produce from origin to destination:
1. Speeding up the goods flow in the chain [5] e.g., by choosing smaller
ordering and transportation lot sizes, and/or using different modes of
transport e.g., air freight instead of sea freight.
2. Postponing or accelerating the aging, i.e., ripening during the
sojourn time in a supply chain to ensure peak quality on arrival e.g.,
by using time-temperature integrating technologies in intelligent
reefer containers. Intelligent containers for fresh products in sea
freight are often equipped with additional control units to make
autonomous decisions on climate control of its transported cargo.
Mercier et al. [36] state that time-temperature dependent deterio­
ration is highly product dependent. According to Janssen et al. [27] and
Mirabelli and Solina [37], product-dependent deterioration functions
are barely addressed in fresh product multi-echelon models.
The aim of this study is to develop a generalizable concept for the
integration of product-specific deterioration derived from biological
sciences in EOQ-based inventory models for multi-echelon supply
chains. To the best of our knowledge, such an integrated approach has
not been discussed in existing literature. The approach will be demon­
strated from a real-life case study for cold chain management in cut
flower supply chains.
The remainder of this paper is structured as follows. To highlight the
research gap, Section 2 gives an overview of (EOQ-based) literature
2
Omega 125 (2024) 103041
related to product-dependent deteriorating functions in multi-echelon
supply chains. Section 3 focuses on generalizable model development
for extending the classical EOQ model to time-temperature dependent
product deterioration, in multi-echelon supply chains. A tested cut
flower vase life prediction model from literature will be integrated to
demonstrate the approach. In Section 4, the extended EOQ model will be
applied to two different multi-echelon cold chains for cut roses i.e.,
common temperature-controlled air freight versus intelligent reefer
containers for sea freight. Section 5 provides the numerical results for
both supply chains. Conclusions follow in Section 6.
2. An overview of existing literature
Especially for inventory replenishment, the basic EOQ model is
extended in various directions. With respect to deterioration, Andriolo
et al. [3] show in their comprehensive survey that a century of EOQ
developments have either focus on using constant and time-varying
deterioration rates, or on assuming general (time-dependent) Weibull
distributions with different scale and shape parameters.
At a more general level of inventory models for perishable products,
several interrelated reviews have been published in the past 25 years.
After Rafaat’s survey on continuously deteriorating inventory models
[42], Goyal and Giri [19] review the advances in this field from 1990 to
the year 2000. Bakker et al. [4] provide an update, succeeding the work
of Goyal and Giri [19] from 2001 to 2011, and Janssen et al. [27]
continue the work of Bakker et.al. by providing a review from 2012 to
2015. A remarkable observation is that Rafaat already called in 1991 for
the development of models based on more sophisticated functions which
can better map real-life deterioration processes. However, after 25 years
of research, Janssen et al. [27] conclude that sample functions still
prevail in literature and more realistic deterioration functions are
lacking.
Mirabelli and Solina [37] provide a review from 2005 to 2020 and
notice a growing interest for optimization strategies of integrated
management for perishable supply chains. However, most of the papers
concern at most 2-level supply chains and the proposed optimization
models are mainly validated theoretically, and case studies are lacking.
Marchi et al. [34] confirm in their review on supply chain finance for
deteriorating products that 71 % of the studies focus on a single actor
perspective, 23 % on a two-echelon supply chain, and only a 5 % con­
siders a three-echelon supply chain. We take the underlying biological
principles of product deterioration as a starting point for highly
perishable material flows in multi-echelon supply chains. Product
deterioration for perishable products starts immediately after harvest.
Product quality continuously decreases irreversibly in, and between,
consecutive echelons. The only options to manage the quality of fresh
product flows between harvest and consumer delivery are either to
reduce the total sojourn time, and/or to slow down product decay by
changing the environmental conditions. From all post-harvest environ­
mental conditions, temperature regimes in consecutive stages of the
supply chains are crucial. However, its impact has not been considered
in EOQ models, yet.
Fresh products may differ in types of post-harvest deterioration due
to microbial, enzymatic, fungal, and/or respiration activity for product
deterioration. Next to (lead) time, cooling is important to inhibit
respiration, suppress enzyme activity, reduce the production of ripening
agents, and slow down the growth of micro-organisms which make both
temperature and sojourn time critical aspects for fresh produce in multi-
echelon supply chains [33,34,36].
Sensor-based, temperature-controlled storage, information has been
used for inventory management to estimate the quality of perishables in
supply chains [13,20,29,31,41,56]. Dada and Thiesse [13] develop a
time-temperature-based simulation model to study the quality of
perishable goods at a retailer under (seven) different issuing policies at
the distributor’s level. The supply chain comprises a manufacturer, a
distribution centre, and a retailer’s store. Products deteriorate according
G.D.H. Claassen et al.
to a linear model with a certain percentage of daily quality decay.
Grunow and Piramuthu [20] model three independent scenarios i.e., for
distributors, retailers, and consumers, and study the benefits of using
sensor-enabled RFID (Radio-Frequency Identification) technology in a
highly perishable food supply chain. The authors develop conditions
under which the implementation of RFID technology could be beneficial
for retailers and distributors and derive expressions for the premium a
customer would be willing to pay for such information. The expression
for quality degradation is based on the sojourn time between the links in
the supply chain and a general product decay parameter λ. Ketzenberg
et al. [29] specifically focus on determining the value of information for
integrating upstream Time-Temperature History (TTH) in a supply chain
(e.g., enabled by RFID technologies) into inventory replenishment de­
cisions at the retail level. It is assumed that if the complete TTH at retail
entrance level is known, the remaining shelf-life can be calculated. The
authors formulate the perishable inventory problem as a Markov Deci­
sion Process and evaluate the value of (TTH) information by simulation.
Zanoni and Zavanella [56], Piramuthu and Zhou [41], and Ketzen­
berg et al. [29] focus on two subsequent echelons in a supply chain.
Broekmeulen and Van Donselaar [6] and Piramuthu and Zhou [41]
consider variable holding and purchasing costs, but no fixed ordering
costs and energy costs for cooling between retail and consumers while
Dada and Thiesse [13], Kouki and Jouini [31], and Ketzenberg et al.
[29] consider the distributor and retail echelons in a supply chain. Kouki
and Jouini [31] consider fixed ordering costs, variable holding, and
purchasing costs. Zanoni and Zavanella [56] study a system that consists
of a distributor that procures, and stocks chilled or frozen products from
a producer, and transports the products directly to retailers considering
both fixed and variable costs at producer’s and distributer’s level.
Specifically for EOQ-based modelling approaches, product decay is
often based on time-dependent (Weibull) deterioration [2,24,32,38,39,
43,51]. Moreover, to highlight the impact of parameters on optimal
policies, the validation of models is mostly based on numerical illus­
trations instead of case-studies. Most recently, [7,9,10] studies the EOQ
model for exponentially deteriorating items. In these studies, items
deteriorate at a constant rate δ, proportionally to the inventory level per
unit time which leads to an exponentially decreasing inventory level
function over time. Deteriorated items are immediately removed from
the stock level, and replenishment is assumed to take place instanta­
neously [9,10].
However, product decay for perishable items is usually more
complicated i.e., product dependent, and foremost determined by post-
harvest environmental conditions in supply chains. We follow biological
sciences, in which both sojourn time and sojourn temperature have been
identified as the main reasons leading to natural deteriorating processes
which makes temperature-controlled logistics extremely important in
cold chain management [30,36].
In biological sciences, time-temperature effects in product-
dependent deterioration models have been studied in the literature.
Tromp et al. [49] combine for instance time and temperature to study
the remaining vase life for cut roses. Çelikel and Reid [12] study the
impact of temperature on postharvest performance for roses and gyp­
sophila flowers. Zhang et al. [57] study the effect of storage time and
temperature on the nutritional quality of walnut male inflorescences
while Iao et al. [25] focus on temperature monitoring for quality pre­
diction and inventory control in the cold chain of ready-to-eat food
during logistics flows. So far, no research is known in which both time
and temperature aspects are integrated into multi-echelon EOQ-based
modelling approaches.
Since cut flowers are still alive after harvesting, the respiration rate
increases exponentially at rising temperatures. This process can be
slowed down by setting the right storage temperature [12,22]. For
example, roses stored at 2.5 ◦ C have a respiration rate at 20 ml CO2.(kg.
h)− 1 and 8.1 days of remaining vase life while roses stored at 10 ◦ C
generate slightly more than doubled respiration rate and reduce the
remaining vase life to 6.5 days [12]. In addition to temperature, the
3
Omega 125 (2024) 103041
sojourn time for cut flowers in the supply chain is important. The longer
the sojourn time, the more quality losses are expected at the same
temperature. Due to this reason, many companies try to shorten their
supply chains by reducing the sojourn time.
Several studies have been published to measure quality losses and
predict the remaining vase life (RVL) of flowers after harvesting [26,49,
52,53]. Tromp et al. [49] and Verdouw et al. [54] use the concept of the
time-temperature sum. A comparable approach of Accumulated Heat
Units (AHU) has been described for fungal, time-temperature-based
product deterioration in Mango’s [44]. The indicator in Tromp et al.
[49] is based on a cultivar-dependent fixed vase life (VL) of non-stored
flowers and an historical database of storage times and temperatures.
Tromp et al. [49] use the so-called degree-days model for quality decay
of cut roses and develop a scientific basis for using the time-temperature
sum as a predictor for the remaining VL after storage and transportation
in the distribution chain, both via theoretical calculations and fitting
experimental VL data, comprising both dry storage (in a box) and wet
storage (in a bucket filled with water). According to this model, the
remaining VL can be found by subtracting the recorded time­
–temperature sum divided by the room temperature from the VL of
non-stored flowers. For example, if the VL of non-stored flowers is 10
days at 20 ◦ C (room temperature), while during the distribution chain
the flowers are kept at 5 ◦ C for 8 days, the recorded time–temperature
sum equals 40 ◦ C days, such that the model predicts a remaining VL of 8
days at 20 ◦ C. The model implies that when storing the flowers during 12
days instead of 8 days at 5 ◦ C, the remaining VL only decreases by
another extra day [49]. This model has been used in the case-study of
Section 4 for the integration of product specific deterioration in
EOQ-based inventory models in multi-echelon supply chains.
3. Model development
To demonstrate the generalizability of the approach, we distinguish
two product-dependent deterioration functions. For the sake of illus­
tration, this section starts following the commonly used Arrhenius
equation for time-temperature indicator systems [35] and takes a
continuous exponential function for microbial product deterioration (e.
g., in milk and meat) as a starting point. Next, we follow a comparable
approach for another cause of product deterioration i.e., respiration in
long-distance supply chains e.g., for cut flowers.
3.1. EOQ-based modelling for microbial deterioration
The total cost function in the classical, single-echelon EOQ model is
defined as:
1 FD
Ctot (Q) = hQ + + pD (1)
2 Q
Where h is the constant holding cost per period per unit, Q the order
size, F the fixed ordering costs per order, D the demand per period and p
the fixed purchase price per product. Since the term pD does not affect
the optimal order quantity, the EOQ problem has been described as:
{ }
1 FD
min hQ + (2)
Q 2 Q
The optimal value Q = Q∗ can be derived from dCdQtot = 0 which implies
that Q∗ can be obtained by the classical formula:
√̅̅̅̅̅̅̅̅̅
2FD
Q∗ =
h
If the underlying product is perishable (e.g., milk), its deterioration
depends on both the sojourn time (s) and the sojourn temperature (τ).
Suppose the process of product deterioration is induced by micro-
organisms. Their growth can be described by (3):
G.D.H. Claassen et al. Omega 125 (2024) 103041

Nt = N0 eμ(τ)s (3) (4) as a function of the temperature:

( )
D Nmax
where Q= ln
μ(τ) N0
Nt := the density of micro-organisms per unit at time t Now, problem (4) can be reformulated and simplified as a function of
μ(τ) := temperature-dependent growth coefficient of the micro-or­ the decision variable τ in (5)
ganisms ⎧ ⎫
s := the sojourn time ⎪
⎪
⎨1 D (N )
⎪
⎪
⎬
F μ(τ)
τ := temperature (5)
max
min h ln + ( ) + G(τ)
τ ⎪⎪2 μ(τ) N0 ⎪
⎪
⎩ ln NNmax
0
⎭
If G(τ) is defined as the costs for keeping the products at τ degrees
during the sojourn time, the constrained optimization problem (4) can The unconstrained problem (5) refers to a single-echelon supply
be formulated comprising inventory costs, ordering costs and costs chain. Next, the approach is projected on a multi-echelon supply chain.
related to cooling: (Fig. 1)
{ } For the sake of simplicity, we focus on m = 2 echelons in Fig. 2. If the
1 FD
min hQ + + G(τ) inventory level of supplier 1 drops to zero after Q1/D periods, replen­
Q,τ 2 Q
ishment is assumed to take place instantaneously. The supply quantity
s.t. Q1 for supplier 1 implies a decrease in stock for supplier 2. In Fig. 2 we
assume, solely as an illustration, that Q2= n2Q1 with n2=3.
(4)
Q
N0 eμ(τ)D ≤ Nmax Order quantities for fresh products at retail level are commonly
expressed in integer units e.g., bunches of flowers, pre-packed trays of
where Nmax is a predefined upper bound for the density of micro- fruits, cartons of milk, or integer numbers of pre-packed pieces of meat
organisms to guarantee the shelf-life. The sojourn time s in (3) can be in single packages. This principle, also referred to as the "integrality
substituted by the maximum time on stock i.e., = QD . The remainder of property", together with the common assumptions of the classical EOQ-
this article is based on the proposition that in the optimum, the model e.g., a steady state demand rate and no capacity limitations, en­
constraint in problem (4) is binding. To prove this proposition, we as­ forces that the order quantity at upper echelons is an integer multiplier
sume that the statements i) and ii) in Assumption 1 hold: of the order quantity at lower echelons. This alignment of order levels
Assumption 1. between consecutive echelons enforces less inventory fragmentation
regarding shelf-lifes, it reduces undesirable “customer order picking” for
i) The function G is strictly monotonically decreasing in τ. In other words, expiration dates at retail level, reduces order frequencies, exploits
as the cooling temperature τ gets closer to ambient levels, the cor­ economies of scale, and fosters collaborations between different stake­
responding cooling costs G(τ) decrease monotonically. holders in multi-echelon supply chains.
ii) The function μ is strictly monotonically increasing in τ. In other words, as From Fig. 2 it can be concluded that the maximum sojourn times
the cooling temperature τ gets closer to the ambient temperature, the
growth of micro-organisms increases monotonically.

Proposition 1. Let us assume that there is an optimal solution (Q∗ , τ∗ ) for

Q
problem (4) and Assumption 1 holds. Then, the inequality constraint N0 eμ(τ)D
≤ Nmax is binding in (Q∗ , τ∗ ).
Proof. We assume that the assertion does not hold and derive a
contradiction. To achieve this, we consider the point (Q∗ , τ∗ ) that is non-
binding for the constraint in (4) and assume it is optimal for problem (4).
Since the constraint is assumed to be non-binding, we have the strict
inequality:
∗
∗) Q
N0 eμ(τ D < Nmax
Then, however, we may consider the point (Q∗ , τ∗ +ε) for ε > 0 and
sufficiently close to zero. Due to continuity of the constraint, this point is
also feasible for problem (4) and, moreover, in view of the fact that G is
strictly monotonically decreasing in τ we have
1 ∗ FD 1 ∗ FD
hQ + ∗ + G(τ∗ ) > hQ + ∗ + G(τ∗ + ε)
2 Q 2 Q
This shows that the point (Q∗ , τ∗ ) is not optimal in contrast to our
assumption.▪
From the above it follows that, in the optimum, the constraint in
problem (4) is binding i.e., an equality. Now, problem (4) can be
reduced to (5) by rewriting the order size Q for the equality constraint in
Fig. 2. Inventory levels at supplier 1 and 2 for n2=3.

Fig. 1. m-echelon supply chain: a supplier in echelon i is supplied from echelon i + 1.

4
G.D.H. Claassen et al. Omega 125 (2024) 103041

Fig. 3. A long-distance chain for m = 3 echelons and J = 2 different phases for transport or handling.

s1 and s2 are equal to s1 = QD1 and s2 = (n2 − 1) QD1 , respectively. constraint in (7) is binding, which follows immediately from Proposition
If we assume, for the time being, that the transportation time be­ 2. Again, we emphasize that Assumption 2 is a rather natural condition
tween the two echelons is negligible, then the total sojourn time stot = s1 that is commonly fulfilled in practice.
m
∏ Reformulating the (equality) constraint gives the following expres­
+s2 = n2 QD1 . Generally, for an m-echelon supply chain holds stot = ( ni ) sion for Q1 :
i=2
( )
Q1 D Nmax
. Q1 = ln (8)
D (n2 − 1)μ(τ2 ) + μ(τ1 ) N0
If we allow for different cooling regimes at each supplier site i, the
(different) sojourn times in each echelon must be considered as they all By substituting (8) into the objective function of (7), a simplified
have an impact on product deterioration. unconstrained optimization problem (comparable to (5)) in the vari­
Let h1 , h2 be the variable inventory cost coefficients for supplier 1 ables n2 , τ1 ,and τ2 results for the two echelons case. This problem can be
and 2 respectively, and F1 , F2 the corresponding fixed setup costs, then solved by minimizing the simplified cost function for different (integer)
the optimization model for the two echelons case is: values of n2 , τ1 , and τ2 .
{ }
1 F1 D 1 F2 D
min h1 Q1 + + h2 (n2 − 1)Q1 + (6) 3.2. Deterioration by respiration in long-distance supply chains
Q1 ,n2 2 Q1 2 n2 Q1
Like in the single echelon case, we assume that deterioration of the Besides intermediate storage, long-distance multi-echelon chains for
product depends on time and temperature. Again, using (3) for calcu­ perishable products require time and temperature control between
lating the growth of micro-organisms, the constrained optimization echelons e.g., for different modes of transport and/or handling. In this
problem (7) can be formulated comprising inventory costs, ordering section we apply the concept to a typical long-distance multi-echelon
costs and costs related to cooling in both echelons: supply chain in floriculture.
{ } Consider a supply chain that consists of i = 1, .., m echelons with
1 F1 D 1 F2 D
min
Q1 ,n2 ,τ1 ,τ2 2
h1 Q1 + + G1 (τ1 ) + h2 (n2 − 1)Q1 + + G2 (τ2 ) different storages temperatures τi and sojourn times si . Between the
Q1 2 n2 Q1
echelons different phases j = 1, .., J for transport (modes), or handling
s.t. (7) are distinguished. Each phase is associated with its own temperature and
sojourn time, denoted by τpj and tpj , respectively. Fig. 3 shows an
(n2 − 1)Q1 Q
+μ(τ1 ) D1 illustration for m = 3 and J = 2.
N0 eμ(τ2 ) ≤ Nmax
Tromp et al. [49] showed that the remaining vase life (RVL) of cut
D

Solving (7) is a constrained optimization problem in the variables Q1 , roses can be predicted effectively by the degree days model in which the
n2 , τ1 , and τ2 . Again, to proof that the constraint in (7) is binding in the recorded time-temperature sum divided by the room temperature is
optimum, we impose similar assumptions on the cost functions G1 (τ1 ) subtracted from the vase life of non-stored flowers:
and G2 (τ2 ) for keeping products in both echelons at τ1 respectively τ2
1 ∑
degrees: RVL = VL0 − (τk − 273.15)tk (9)
20 k
Assumption 2. We assume that the following statements hold:
where VL0 refers to the vase life of freshly harvested (non-stored) cut
i) The functions G1 and G2 are strictly monotonically decreasing in τ1 , flowers at room temperature (20 ◦ C), τk to the temperature in Kelvin (K),
respectively τ2 . and tk to the storage time (days) in stage k.
ii) Again, the function μ is strictly monotonically increasing in τ. Applying (9) to the example in Fig. 3 means that the remaining vase
life at the end of the chain equals VL0 minus the total losses of vase life
Proposition 2. If Assumption 2 holds and, moreover, if there is an optimal during storage in all echelons i (LVLei ) and intermediate phases j for
point (Q∗1 , n∗2 , τ∗1 , τ∗2 ) for problem (7), then the inequality constraint in (7) is handling and transport (LVLpj ) :
binding for (Q∗1 , n∗2 , τ∗1 , τ∗2 ).
∑
m ∑
J

Proof. The proof follows the same line of arguments as the proof of RVL = VL0 − LVLei − LVLpj
Proposition 1. Let us assume that there is an optimal point (Q∗1 , n∗2 , τ∗1 , τ∗2 )
i=1 j=1

for which the constraint in (7) is non-binding. Then we have the strict If the parameter VLmin denotes a predefined lower bound for the vase
inequality: life at retail level, then:
( )
∗ ( 2 ) 1 1 ∑ ∑
n∗ − 1 Q∗ Q∗ m J
N0 eμ(τ2 ) D +μ(τ∗1 ) D1
< Nmax VL0 − τ i si + τpj tpj ≥ VLmin
20 i=1 j=1
Then, due to continuity of the constraint, the point (Q∗1 , n∗2 , τ∗1 +ε, τ∗2 )
for some ε > 0 and sufficiently close to zero, also fulfils the inequality Correspondingly to the assumptions in the problems (4) and (7), the
and is, thus, feasible for problem (7). Again, using strict monotonicity of remaining vase life (RVL) equals the predefined lower bound VLmin in the
the functions it becomes clear that this point also provides an improved optimum. Formally, this can be shown along the same lines of arguments
objective value since G1 is strictly monotonically decreasing in τ1 . Thus, as the proof for the Propositions 1 and 2. From a practical point of view,
the point (Q∗1 , n∗2 , τ∗1 , τ∗2 ) is not optimal in contrast to our assumption. ▪ this can also be explained. If the constraint would be non-binding i.e.,
Analogous to the transition between (4) and (5) previously, problem the remaining vase life (RVL) at retail level is larger than the predefined
(7) can also be simplified by exploiting the fact that in an optimum the lower bound VLmin . In such cases, the costs can still be reduced while
ensuring a sufficient quality level VLmin . Note that we again assume strict

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G.D.H. Claassen et al. Omega 125 (2024) 103041

Fig. 4. Cut rose supply chain network by air freight.

monotonicity of the constraint and the objective function, which are { ( )

∑m ∏i
typically fulfilled in practice. So, TC = min
1
Q1 h1 ρτ1 + hi ρτi (ni − 1) nk− 1
ni , τ i 2
i=2 k=2
∑ ∑ (12)
m J
τi si = 20(VL0 − VLmin ) − τpj tpj ( ( )) }
1 ∑m
Fi D ∑ J
( )
i=1 j=1
+ F1 D + ∏i + Gj τpj , ρτpj
Q1 i=2 k=2 nk j=1
i− 1
∏
( Q1 )
The sojourn time in each echelon equals si = D
(ni − 1) nk . For In which Q1 can be substituted from (10) and Gj (τpj , ρτpj ) denotes
k=2
the cost function for transport and handling in phase j.
m > 1 and n1 = 1 it implies that:
(∑ )
J 4. Application to the Kenya-dutch cut rose supply chain
20D(VL0 − VLmin ) − D j=1 τpj tpj
Q1 = ∑ ( ∏ ) (10)
τ1 + mi=2 τi (ni − 1) ik=2 nk− 1 The cut-flower market has become highly international in recent
To formulate the objective function in a multi-echelon EOQ-based years and it is led by the main trading hubs located in Europe [14]. With
model, the cooling costs at different (storage) temperatures in the cold 25 % of annual growth rate, floriculture is considered as a high-value
supply chains are needed. Zanoni and Zavanella [56] describe a model agricultural sector in which cut flowers account for 60 % of the world
to determine these costs. The authors distinguish between two ratios i.e., trade, worth about US$ 11 billion annually.
one for the performance of the cooling phase (COPt ) and a reference Kenya is one of the countries that produces and exports cut roses to
(COPref ): the European market. Most of the cut roses exported to Europe are from
large to medium-scale growers. At the beginning of the chain, roses are
τ
COPτ = harvested at the tight-bud stage and moved into cold storage facilities on
τhot − τ
farms. Currently, cut roses are either transported by air or sea freight
τref with cooling systems and sold to wholesalers and retailers (flower shops)
COPref = and finally reach customers with at least a 7-days vase life.
τhot − τref
Fig. 4 shows current practice for the Kenyan-Dutch cold chain by air
where τ refers to the product storage temperature in Kelvin (K), τhot to freight consisting of m = 3 echelons (grower, wholesaler, retailer), and
the outside temperature (K) and τref denotes the reference temperature J = 4 intermediates phases for transport and handling [22]. Based on
(K) to determine the relative cooling costs. Both ratios can be used to the observations in practice, the temperature is commonly set to 1 ◦ C in
compute the coefficient ρτi , ρτpj to determine the additional costs for the upstream chain while temperatures from the wholesaler to the
refrigerated storage in echelon i and transportation/handling in phase j, retailer are commonly set to 10 ◦ C. The associated lead times for
respectively. transport and handling in the different phases j = 1, .., 4 are presented in
brackets for each phase.
COPref COPref
ρτi = ; ρτpj = (11) For air transport, Table 1 provides the estimated costs.
COPτi COPτpj
Table 2
where ρ = 1 refers to non-refrigerated and ρ > 1 to refrigerated storage, Energy performance for air- and sea freight.
transport, or handling. Now, for m > 1 and n1 = 1 the unconstrained,
ρτp4 ρτp3 ρτp2 ρτp1
m-echelon optimization problem is: ρτ2 ρτ1
27.19 27.19 21.39 21.39 19.67 11.39 1

Table 1
Supply chain data for air freight.
Stage Order quantity Qi Sojourn time Storage temperature Fixed ordering costs Holding costs Transport costs
(bunch) (days) (◦ C) (€/order) (€/bunch/week) (€/bunch)

i = Grower Q3 Q3 − Q2 1–5 20 0.02

3 D
j = Handling 1 1 30 0.002
4 (Grower - Nairobi)
j = Transport to Schiphol 3/8 1 500 0.035
3
j = Handling 1 1 30 0.002
2 (Airport –Wholesaler)
i = Wholesaler Q2 Q2 − Q1 1–15 50 0.05
2 D
j = Truck (Wholesaler- 0.5 10 50 0.002
1 Retailer)
i = Retailer Q1 Q1 20 50 0.13
1 D
Customers D=1000 weekly 20

6
G.D.H. Claassen et al. Omega 125 (2024) 103041

Fig. 5. Cut rose supply chain network by sea freight.

Table 3
Supply chain data for sea freight.
Stage Order quantity Qi Sojourn time Storage temperature Fixed ordering costs Holding costs Transport costs
(bunch) (days) ( ◦ C) (€/order) (€/bunch/week) (€/bunch)

i = Grower Q3 Q3 − Q2 1–5 20 0.02

3 D
j = Handling 4 1 30 0.003
4 (Grower - Mombasa)
j = Shipping to R´dam 14 1 200 0.02
3
j = Handling 1 1 30 0.002
2 (Habor –Wholesaler)
i = Wholesaler Q2 Q2 − Q1 1–15 50 0.05
2 D
j = Truck (Wholesaler- 0.5 10 50 0.002
1 Retailer)
i = Retailer Q1 Q1 20 50 0.13
1 D
Customers D = 1000 weekly 20

quantities for the Dutch retailer are 301 (air freight) or 206 bunches (sea
Table 4 freight).
Optimal order quantities Q*(bunches) and Total costs TC (€/week). After the third replenishment for the retailer, the wholesaler is out of
Qr Qw Qg TC stock and receives supply via the handling agents from the grower in
Air freight 301 903 903 2214 Kenya (903 respectively 618 bunches) for the next cycle of three re­
Sea freight 206 618 618 1810 plenishments to the retailer. The supply chain network by air freight is
substantially more expensive (22 %) than its alternative by sea freight.
Fig. 6 shows how the costs are divided over all echelons i including the
intermediate phases j in both supply chains. The difference in total costs
between both supply chains is foremost due to the distinction in trans­
Transportation costs are based on the value chain analysis in Hortiwise port modes for phase j = 3 (Fig. 4 and 5).
(2012). Ordering and inventory holding costs are based on expert Sojourn times in each echelon i are calculated according to Table 2
knowledge from practice. and 3 and shown in Table 5. The temperatures in the intermediate
Table 2 provides an overview of the energy performance for all phases j of the network, and at retail level i = 1 are set to common
stages i and j in the cold chain. The parameters ρτi and ρτpj are computed practice. The difference in total lead times between both supply net­
according to (11) in which τref (Kenya) is 298.15 K; τref (NL) is 293.15 K; works is (again) mainly due to the shipping in phase j = 3. However, in
τhot (Kenya) is 299.15 K and τhot (NL) is 294.15 K. contrast to the total costs, now at the benefit of air freight. The signifi­
Fig. 5 shows the Kenyan-Dutch cold chain for sea freight consisting of cant difference in total lead times between both supply chains may
m = 3 echelons (grower, wholesaler, and retailer). The arrows between explain why transport by air freight still dominates in current practice,
the echelons represent the intermediate phases j = 1…4 for transport despite the substantial difference in total costs between both networks.
and handling [22]. Both the (sojourn) time and temperatures in the Fig. 7 shows the impact of both time and temperature on the losses of
intermediate phases j are fixed. In the phases j = 3 and 4, the lead-times Vase Life (VL) for air- and sea freight. Despite the significantly larger
are substantially longer than for airfreight. All other parameter values losses in phase j = 3 for sea freight (23 %), Fig. 7 shows that the main
are equal for both cold chains. losses of VL are due to the common lack of cooling regimes at retail level.
Table 3 provides the costs for the sea freight chain. The values for the Given the calculated order levels, the introduction of cooling facil­
energy performance of the cooling system are the same as in the air- ities at retail level may have a significant effect on the remaining vase
freight chain (see Table 2). life (RVL) at consumer level. Reversely, alternative cooling regimes and
order levels can be recalculated assuming cooling facilities at retail level
5. Results which gives insights in the development of the total costs in the cold
chains. Although the latter integrated approach may translate into
The optimal order quantities for the retailer (Q1*= Qr), wholesaler greater joint benefits for multi-echelon supply chains, it may not justify
(Q2*= Qw) and grower (Q3*= Qg) and total costs TC in (12) are shown in the additional investments for (most) retailers without considering the
Table 4. For a weekly demand of 1000 bunches and a minimum vase life (dis) advantages for stakeholders upstream in the supply chains.
requirement at retail level of VLmin = 7 days in (10), the optimal order

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G.D.H. Claassen et al. Omega 125 (2024) 103041

Fig. 6. Supply chain costs per stage in the networks.

Table 5
Lead- and Sojourn times L_S (days), Temperature τ [ ◦ C], and total lead time.
Stage i=3 j=4 j=3 j=2 i=2 j=1 i=1 Total (days)

L_S (days), τ [ ◦ C] Air freight 0 [1] 1 [1] 0.375 [1] 1 [1] 4.2 [2.5] 0.5 [10] 2.1 [20] 9.175
L_S (days), τ [ ◦ C] Sea freight 0 [1] 4 [1] 14 [1] 1 [1] 2.8 [2.5] 0.5 [10] 1.4 [20] 23.7

Fig. 7. Lost Vase Life per stage in both networks.

6. Concluding remarks deterioration of perishable, fresh products. Furthermore, addressing

Literature shows that order-level inventory systems for perishable
items are commonly modelled by parametric approaches based on
probability distributions e.g., a time-dependent (Weibull) deterioration
rate. In practice, deterioration processes of perishable fresh products are
highly intricate, characterized by a strong dependence on specific
product attributes. Crucially, these processes are foremost influenced by
the interplay between both the (sojourn) time and the prevailing envi­
ronmental conditions throughout the supply chain. Among all envi­
ronmental conditions, temperature is the most critical factor for the
product deterioration in inventory management systems should priori­
tize holistic approaches, such as employing multi-echelon models that
encompass entire cold chains.
This study aims to address the afore mentioned limitations. Instead
of employing a constant (time-dependent) deterioration rate, we pro­
pose a generalizable concept to integrate knowledge from biological
sciences on product-specific deterioration into EOQ-based inventory
management models. For the integration of product dependent deteri­
oration in an EOQ-type modelling approach, general properties for
constrained optimization problems are exploited for a single echelon

8
G.D.H. Claassen et al.
case to derive an unconstrained optimization problem. Next, we extend
the approach for its use in multi-echelon supply chains. To demonstrate
the generalizability of the approach, product decay based on two
fundamentally different deterioration processes i.e., microbial and
respiration activities, are considered. Other time-temperature depen­
dent deterioration models e.g., due to enzymatic degradation, and/or
the breakdown by fungi can be integrated accordingly.
We demonstrate the applicability of extending the classical EOQ-
model to product dependent deterioration in a multi-echelon supply
chain, from a real-life case study in floriculture. Two commonly used
multi-echelon supply chains for cut roses are considered and compared
for a pre-defined minimum product quality at retail level. The results
clearly show the combined impact of sojourn time and temperature re­
gimes on the order quantity levels, the total costs, and the losses of
product quality in all echelons and intermediate phases of trans­
portation and handling in the supply chains. Case-specific analyses can
provide new insights to initiate discussions between different supply
chain actors and contribute to the substantiation of what is feasible in
practice and what is not, which may lead to new collaborative guidelines
between different actors in (long) supply chains.
We study the impact of the (sojourn) time- and variable temperature
regimes on the lifetime of perishable fresh products in multi-echelon
supply chains. Future research may integrate other environmental
conditions to develop models, specifically tailored for real-life product-
dependent deterioration processes. Furthermore, this study takes the
classical EOQ model, including its fundamental assumptions, as a
starting point. Meanwhile, numerous studies have scrutinized and
addressed the underlying assumptions, or even extended the EOQ-
concept to new aspects and circumstances in practice. Future research
may be inspired by incorporating previous accomplishments into our
approach, to develop novel EOQ-based models for perishable (fresh)
products in multi-echelon supply chains.
CRediT authorship contribution statement
G.D.H. Claassen: Conceptualization, Formal analysis, Investigation,
Methodology, Software, Writing – original draft, Writing – review &
editing, Validation, Supervision. P. Kirst: Conceptualization, Method­
ology, Validation, Writing – review & editing. A. Thai Thi Van: Data
curation, Formal analysis, Investigation, Software, Visualization. J.C.M.
A. Snels: Data curation, Formal analysis, Resources, Writing – review &
editing, Validation. X. Guo: Data curation, Formal analysis, Resources,
Validation, Writing – review & editing. P. van Beek: Conceptualization,
Methodology, Supervision, Writing – review & editing.
Declaration of competing interest
The authors declare that they have no known competing financial
interests nor personal relationships that could have any impact on the
work as reported in the manuscript.
Data availability
Data will be made available on request.
Acknowledgements
The authors thank the two anonymous referees for their valuable
comments and stimulating remarks on an earlier version of this manu­
script. They commemorate Prof. dr. Paul van Beek who initiated the
research and unfortunately passed away in May 2023, shortly after the
initial submission. The authors dedicate this publication to his memory.
9
Omega 125 (2024) 103041
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