2 research outputs found
Dynamic inventory sharing, ordering, and pricing strategies for perishable foods to maximize profit and minimize waste
No full textEffective management of perishable food products is essential for grocery retailers to balance profitability and waste reduction. This study addresses the challenge of selling perishable food products with varying ages across two branches, incorporating consumer behavior and demand shifts between old and new products. A bi-objective infinite horizon dynamic programming model is developed to optimize centralized pricing, ordering, and inventory sharing decisions, aiming to maximize profit and minimize waste. Numerical analysis demonstrates that inventory sharing effectively balances stock levels and reduces food waste. Findings indicate that prioritizing waste reduction leads to higher price discounts and increased inventory sharing, while prioritizing profit maximization results in selling newer products and reducing inventory sharing. Sensitivity analyses highlight the importance of market segmentation and price differentiation strategies. These insights provide valuable guidance
for retailers in refining inventory and pricing decisions, adapting to regulatory pressures, and improving overall supply chain performance
Dynamic inventory control and pricing strategies for perishable products considering both profit and waste
No full textWith the increasing sustainability considerations throughout the world, there is an increasing interest in the effective management of perishable products both in the industry and the academia. There is a need to control the inventories, as well as the prices of perishable products in order to increase the profits while minimizing the waste. In this study, we focus on a retailer who sells old and new perishable food products, enabling demand shifts between products based on their prices and consumer behaviors. A bi-objective dynamic programming
model is developed to optimize the discounted price, sale price, and order quantity of perishable food products in order to maximize the retailer’s profit and minimize food waste. We develop four static and dynamic pricing policies commonly practiced and quantify the advantages of dynamic pricing and price differentiation between old and new products in terms of both profit and waste. Our findings reveal that significant benefits can be obtained when the order quantity and the old product’s sale price decisions are given in a dynamic manner by considering the available inventory at hand. Additionally, this research analyzes the results of various weight combinations for profit and waste in the objective function. The findings highlight the significance of waste and
sustainability concerns, underline the tradeoff between profit and waste and provide insights to companies to achieve improvements in their system results
