A new (q, S) policy to manage inventory for low shelf life products facing deterioration in quality and age differentiated requirements

•A new (q*, S) policy to manage inventory of perishable products.•Applicable to products with deterioration in quality and age differentiated demand.•Mathematical programming model for optimizing inventory considering blood platelets.•Facility optimization of blood banks.•Demand fluctuations, blood bank classification and comparison with existing policy. Inventory management of products with short shelf life is a critical problem for managers due to its unique characteristics. The efficient and economical planning to manage inventory of such products is important and the complexity multiplies when such products face a deterioration in quality/effectiveness during its shelf life. This paper proposes a new (q*, S) policy with its mathematical model which will help to establish an efficient and economical system which could handle the above situation. The efficiency of this policy is evaluated by considering blood platelets as an example. Platelet transfusions are vital in patients undergoing chemotherapy and those suffering massive bleeding. Shortage of platelets can lead to cancellation or postponement of major operations and excessive storage can lead to wastage due to its low shelf life. For those patients undergoing chemotherapy and bone marrow transplantations (critical illness patients), young platelets (3 to 4 days’ shelf life) are highly preferred, as it can give significant increase in platelet count and increase the interval between transfusions. However, for general surgery and traumatology patients (less critical cases), platelets of any age will serve the purpose as the deficiency is temporary and bone marrow will be able to produce the required quantity. A new (q*, S) policy is proposed through this study to ensure the supply of young platelets for the treatment of critical illness patients and to strike a balance between the shortage in supply of platelets of any age (less critical illness patients) and the expiration of platelets. From the computational studies conducted, this policy is observed to outperform several existing policies discussed in the literature. Other considerations in this paper are fluctuations in demand in certain months and classification of central blood bank on the basis of the type of hospital it caters to. Another major contribution of this paper is the optimization of facility required to store platelets. Optimizing the order-up-to-level without considering the capacity could lead to wastage of resources as there co