- 期刊
Optimal Inventory Management for Perishable Goods when The Demand Depends on Product Price, Inventory Age, and Displayed Inventory Level
摘要
While the demand for perishable goods continuously increases, factors such as price, age, and displayed inventory may simultaneously affect the demand for such goods and make the inventory management of perishable goods even more difficult. In this study, an economic order quantity (EOQ) model with demand as a multivariate function of product price, inventory age, and displayed inventory level was developed. Zero ending inventory assumption was also relaxed to better formulate the strategies that companies may use to boost the sale and profit. Three major decision variables (i.e., product price, ending inventory level, and inventory cycle time) were considered in order to maximize the total profit. Analytical results of this study demonstrated that the total profit is strictly pseudo-concave in the three decision variables, and thus reduce the search for solutions to a unique local maximum. Numerical examples to illustrate the theoretical results and to highlight managerial insights are also presented.