Development of an integrated modelling framework for retailers of perishable products: a dynamic programming approach

In today's extremely competitive global market scenario, retailers of perishable products are facing the challenges of maintaining inventory and deciding on the optimal order quantity so as to fulfil customer demands as well as to minimise cost. This paper proposes an integrated model that allows easy and quick exploration and selection of the best ordering policy from among various available alternatives regarding perishable products at the retailer end. Using this approach, retailers can take decisions at any instant regarding placing of orders on the basis of available inventory and allocation of products with respect to shelf life to customers. The modelling algorithm is based on dynamic programming approach, and is developed using the programming platform of MATLAB software. An example, case problem is used to demonstrate the applicability of the proposed integrated approach.