Inventory control and price discount policies for perishable products with age and price-dependent demand

Document Type : Article

Authors

Department of Industrial Engineering, Babol Noshiravani University of Technology, Babol, 47148-71167, Iran

10.24200/sci.2022.57315.5174

Abstract

In this paper, the inventory control and price discount problem for perishable products with price and age-dependent demand is investigated. The seller adjusts prices to influence demand and optimize profits through determining discount points, especially discount start time. A nonlinear mathematical model is proposed to find optimal order quantity, discount points, and prices before the product's expiration date to maximize profit. The developed model provides the number of discounts such that the shortage will not be allowed before the expiration date. It is observed that determining a proper discount start time provides an optimized sales plan with higher profit. Moreover, the particle swarm optimization (PSO) and the genetic algorithm (GA) are applied to solve the problem. The Taguchi approach is used to find optimum control parameters of PSO and GA. To guarantee the validity of PSO and GA, the nonlinear model is solved by the BARON solver in GAMS software. The performance of the algorithms is evaluated based on the real values of parameters for two perishable products (i.e. Cheese and Mayonnaise Sauce) and some random test problems. The computational results demonstrate that the proposed GA outperforms the PSO algorithm.

Keywords


Reference
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