A Study on Inventory Models for Perishable Items in a Serial Supply Chain Operating with Price Markdowns

Abstract

AbstractRetailers and wholesalers of fresh produce face the challenges of selling their items before the end of its limited shelf-life and fixing the price to reflect the freshness of their produce. In this work, pricing and inventory control of perishable items in a multi-stage supply chain with price-dependent demand inspired by a real-life fresh produce supply chain in India are studied. Mathematical models are formulated for studying the performance of various ordering policies for a multi-stage supply chain and to determine the markdown price of products during the shelf-life. Two different cases of modes of inventory-position calculation, based on the age of inventory, are also addressed. The performance analysis comparing the total supply chain profit for six well-known ordering policies, namely periodic review \(\left( {R,S} \right)\), continuous review \(\left( {s,Q} \right)\) and \(\left( {s,S} \right)\), hybrid \(\left( {R,s,Q} \right)\) and \(\left( {R,s,S} \right)\), and Hybrid-Haijema \(\left( {s,S,q,Q} \right)\), is carried out.KeywordsInventory controlPerishable inventoryOrdering policiesPrice markdown