Piling and discounting perishable products: optimal replenishment and discounting policy for perishable products
by Maher A.N. Agi; Xinghao Yan; Öncü Hazir
European J. of Industrial Engineering (EJIE), Vol. 18, No. 2, 2024

Abstract: Retail stores often display large quantities of perishable products that they sell at full price over a given period and then at a discount until the end of the inventory cycle. We investigate this common practice by considering a product which is subject to continuous decay through time. The demand is a function of both the price of the product and the inventory level. The retailer may discount the product once during the cycle. Closed-form expressions were provided for the maximum discounting time and cycle time. The conditions under which an optimal discount policy exists were established. The results provide insights to decision-makers on how to design a markdown policy for perishable products. [Received: 9 November 2021; Accepted: 31 December 2022]

Online publication date: Fri, 01-Mar-2024

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