Advanced payment strategy for EOQ model regarding perishable product with maximum lifetime, customer return, preservation technology and partial backlogging Online publication date: Tue, 30-Apr-2024
by Ravendra Kumar; Ravish Kumar Yadav
International Journal of Operational Research (IJOR), Vol. 50, No. 1, 2024
Abstract: Many products, like fruits, vegetables, etc. have a certain life that depends on the preserving conditions and also the demand of these products depends on their life. Selling price and the investment in a preservation mechanism are the most important factors in inventory management. An economic order quantity model is proposed focusing on perishable products having a certain lifetime. A preservation mechanism has been implemented to extend the product's lifetime. Two different models with or without shortages are presented here. Concavity of objective function is established using several theorems. Developed model is validated with the help of numerical examples. Sensitivity is also carried out. The results show that the retailer's profit reduces when dealing with products for which customers are more concerned about the product's lifetime. The findings also suggest that in order to increase profit, retailers should design an inventory policy that controls purchase costs and interest.
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