Which retail strategy for shelf life products can satisfy consumers under game policy?

Abstract

Under the game competition, it is very difficult to maintain all retail strategies for shelf life fast-moving consumer (FMCG) goods products with the random demand. Due to random demand, a truncated distribution is, a conditional distribution, generated by constraining the domain of another probability distribution. This study focuses on retail management in the service sector of a manufacturer and retailer. The demand rate and ordering quantity are probabilistic and follow a doubly truncated exponential distribution with a short shelf life, but it can be extended using specific preservative measures. The model considers shelf life as a decision variable and addresses products with an extendable shelf life. The mathematical representation of the model is provided to determine the optimal policy for production and replenishment in a Nash equilibrium decentralized game. The concept is demonstrated using mushrooms as an example of fast-moving consumer goods, and results suggest that the retailer can increase their profits by extending the product's shelf life by 4.2 days beyond its original shelf life which is 2 days.