{"title":"Retail Inventory Management for Perishable Products with Two Bins Strategy","authors":"Madhukar Nagare, Pankaj Dutta, Amey Kambli","volume":76,"journal":"International Journal of Industrial and Manufacturing Engineering","pagesStart":541,"pagesEnd":547,"ISSN":"1307-6892","URL":"https:\/\/publications.waset.org\/pdf\/2748","abstract":"
Perishable goods constitute a large portion of retailer inventory and lose value with time due to deterioration and\/or obsolescence. Retailers dealing with such goods required considering the factors of short shelf life and the dependency of sales on inventory displayed in determining optimal procurement policy. Many retailers follow the practice of using two bins - primary bin sales fresh items at a list price and secondary bin sales unsold items at a discount price transferred from primary bin on attaining certain age. In this paper, mathematical models are developed for primary bin and for secondary bin that maximizes profit with decision variables of order quantities, optimal review period and optimal selling price at secondary bin. The demand rates in two bins are assumed to be deterministic and dependent on displayed inventory level, price and age but independent of each other. The validity of the model is shown by solving an example and the sensitivity analysis of the model is also reported.<\/p>\r\n","references":"[1] S. Nahmias, S. \"Perishable Inventory Theory: A review\", Operations\r\nResearch, vol.30, 680-708, 1982.\r\n[2] F. Raafat, \"Survey of literature on continuously deteriorating inventory\r\nmodels,\" Journal of the Operational Research Society, vol. 42(1), 27-37,\r\n1991.\r\n[3] S. K. Goyal, and B.C. Giri, \"Recent trends in modelling of deteriorating\r\ninventory,\" European Journal of Operational Research, vol. 134(1), 1-\r\n16, 2001.\r\n[4] H. B. Wolfe, \"A model for control of style merchandise,\" Industrial\r\nManagement Review, vol.9 (2), 69-82, 1968.\r\n[5] R.I. Levin, and C.A. McLaughlin, Productions\/Operations\r\nManagement: Contemporary Policy for Managing Operating Systems,\r\nMcGraw-Hill, New York, 1972.\r\n[6] E. Silver and R. Peterson, Decision Systems for Inventory Management\r\nand Production Planning, Wiley, New York, 1985.\r\n[7] R. Gupta, and P. Vrat, \"Inventory models for stock dependent\r\nconsumption rate,\" Opsearch, vol. 23(1), 19-24, 1986.\r\n[8] R.C. Baker and T. Urban, \"A Deterministic inventory system with an\r\ninventory-level-dependent demand rate,\" Journal of the Operational\r\nResearch Society, vol. 39(9), 823-831, 1988.\r\n[9] T.K. Datta and A.K. Pal, \"A note an inventory model with inventorylevel\r\ndependent rate,\" Journal of Operational Research Society, 41(10),\r\n971-975, 1990.\r\n[10] G. Padmanabhan and P. Vrat, \"EOQ model for perishable items under\r\nstock dependent selling rate,\" European Journal of Operational\r\nResearch, vol.86 (2), 281-292, 1995.\r\n[11] H. Soni and N. Shah, \"Optimal ordering policy for stock-dependent\r\ndemand under progressive payment scheme,\" European Journal of\r\nOperational Research, vol.184 (1), 91-100, 2008.\r\n[12] T. Urban, \"An inventory model with an inventory-level-dependent\r\ndemand rate and relaxed terminal conditions,\" Journal of the\r\nOperational Research Society, vol.43 (7), 721 - 724, 1992.\r\n[13] P. D. Larson, and R. A. DeMarais, \"Psychic stock: An independent\r\nvariable ategory of inventory,\" International Journal of Physical\r\nDistribution and Logistics Management, vol.29 (8), 495 - 507, 1999.\r\n[14] S. Smith and D. Achabal, \"Clearance Pricing and Inventory Policies for\r\nRetail Chains,\" Management Science, vol. 44(3), 285-300, 1998.\r\n[15] M. Nagare, and P. Dutta, \"Continuous review model for perishable\r\nproducts with inventory dependent demand\", Proceedings of the\r\nInternational Multi-Conference of Engineers and Computer Scientists\r\n2012, Vol II, IMECS 2012, March 14-16, 2012, Hong Kong.\r\n[16] P. Dutta, A. Kambli, and A. Grover, \"Cost and life-cycle analysis of\r\nperishable products,\" Master-s Thesis submitted to IIT Bombay, 2010.\r\n[17] S. Kar, A. K. Bhunia, and M. Maiti, \"Inventory of multi-deteriorating\r\nitems sold from two shops under single management with constraints on\r\nspace and investment,\" Computers & Industrial Engineering, vol.28,\r\n1203- 1221, 2001.\r\n[18] K. Das, and M. Maiti, \"Inventory of a price and lot differential item sold\r\nfrom two shops under single management with shortages and variable\r\ndemand,\" Applied Mathematical Modelling, vol.27, 535-549, 2003.\r\n[19] H. Hwang and H. Kyu, \"An optimal procurement policy for items with\r\nan inventory level-dependent demand rate and fixed lifetime,\" European\r\nJournal of Operational Research, vol.127, 537-545, 2000.\r\n[20] S. Han, Y. Oh, and H. Hwang, \"Retailing policy for perishable item sold\r\nfrom two bins,\" APIEMS, pp.2623-2629, 2009.\r\n[21] S. Han, Y. Oh, and H. Hwang, \"Retailing policy for perishable item sold\r\nfrom two bins with mixed issuing policy,\" Journal of Intelligent\r\nManufacturing, vol. 23(6), 2215-2226. 2012.","publisher":"World Academy of Science, Engineering and Technology","index":"Open Science Index 76, 2013"}