An Inventory Model For Deteriorating Items With Product Freshness And Shelf-life

In modern inventory management, because of a wide variety of goods, the inventory isdifficult to manage, and too much inventory will take a lot of money then affect company’s cashflow. For deteriorating goods inventory management, companies should use a more reasonableinventory management method to reduce deterioration losses, and achieve a balance betweeninventory costs and profits to increase profits. Therefore, in the study of deteriorating goodsinventory management issues need to combine more practical for businesses to establish theoptimal inventory control models.Combined with the actual situation on the basis of previous studies, this paper analysesdifferent strategies about selling fresh products and shelf-life products from the perspective ofthe retailer’s. Considering the market demand is unknown, this paper establishes differentinventory models of deteriorating goods under demand dependent on the price and stochasticdemand. This paper is divided into three chapters:In chapter one, firstly introduces the concept of inventory and inventory management, thendescribes the causes of inventory produced and types of inventory. Finally shows the importanceand necessity of the deteriorating items research in the inventory system.In chapter two, an EOQ model is established which for deteriorating items with pricedependent demand and product freshness. First, we respectively study the retailer’s profit, saleprice and order quantity about the two kinds of supply modes of supplier. Then by comparing weestablish an inventory model to maximize the total profits of retailer in the whole cycle. Finally,the rationality of the model is verified by a numerical example, and sensitivity analysis showsthat freshness and deterioration rate of product affect retailer’s order quantity and profits.In chapter three, considers an inventory decision problem for deteriorating items with ashelf life under stochastic demand. Based on the end of the running cycle there may be two cases,out of stock and the remaining, we establish the retailer’s optimal order quantity model. Throughanalysis, we give an algorithm to solve the retailer’s optimal replenishment quantity, and somerelevant conclusions are drawn by numerical examples and sensitivity analysis to verify theconclusions.