Inventory Management Of Perishable Products In A Retail Business: A Comparison With And Without Backroom In-Store Replenishment Policies
Traditional methods for managing the inventory are not 100% applicable in the case of perishable products as they have shorter product life. As a result, perishable need extra attention, otherwise high outdating and lost sales cost, which would contribute hugely for the firms to suffer a huge loss will incur. In this paper, we studied the replenishment policies in each scenario to manage the inventory of perishable products keeping into consideration the age of perishable inventories. We also compared the outcomes of the replenishment policies with and without Backroom and found out how and in what situations one policy could outperform the others in each scenario. The results will show that in an environment, which contain important features of the real-life retail environment, the product age based policies will lead to substantial cost reductions as compared to the ones that does not take the age of inventories into consideration.
Index Terms- Inventory management, Perishable products, In-store replenishment policies, Simulation and optimization.