A Green and Waste-Conscious Optimization Model for Perishable Inventory with Quality-Dependent Demand and Salvage Policy

DHARMESH KATARIYA; Tirthraj  Nisarta

doi:10.26713/cma.v17i3.3593

Authors

DHARMESH KATARIYA SHANTILAL SHAH ENGINEERING COLLEGE, BHAVNAGAR, GUJARAT
Tirthraj Nisarta Gujarat Technological University, Ahmedabad, Gujarat, India

DOI:

https://doi.org/10.26713/cma.v17i3.3593

Keywords:

Perishable product; deterioration; freshness; green efforts; markdown; salvage

Abstract

Appropriate inventory decisions for perishable products are essential for maximizing profit in business operations. The uniqueness of this study lies in developing an integrated mathematical modelling framework that reduces end-of-cycle waste via a markdown and salvage value strategy, while explicitly modelling demand as a function of selling price, freshness quality, and greening effort, and accounting for both physical deterioration and quality-dependent degradation of perishable products. The objective of this study is to jointly determine the optimal selling price, greening level, cycle time, and ordering quantity that maximize the retailer’s total profit by employing classical optimization methods. The model becomes more reliable by incorporating real-life examples. For validation of the proposed model, numerical illustrations are provided for both zero and non-zero ending inventory cases. The impact of inventory parameters is analysed through sensitivity analysis, and corresponding managerial insights are derived. The results indicate that the integrated consideration of pricing, freshness, greening efforts, markdown strategies, and salvage value reduces waste and significantly enhances profitability in perishable product management.

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