Joint Pricing and Inventory Policies for Perishable Items with Price Discount based on Freshness Index

Abstract

It is generally observed that the products losses its freshness with the course of time that stimulates depression in demand of the product. In these circumstances, price discounts are necessary to raise the market. This is why, when the product's the index of freshness reaches a certain level, we created an inventory model wherein price reductions are provided at a sale price. The main goal is to figure out what the best selling price and cycle time are in order to maximise profit. The meaning and uniqueness of an ideal model solution are incorporated into the circumstances. The next move is to use a simple algorithm to find an optimal solution. Finally, a numerical example is presented, followed by a sensitivity analysis.