Optimizing Inventory Management for Perishable Goods: Managing Exponential Demand Variations, Stable Holding Charges, and Partial Backlog Handling

Abstract

In the ever-evolving landscape of modern business, adept inventory management stands as a cornerstone of competitiveness and profitability. This research unveils a tailored inventory optimization model designed for perishable goods, accounting for critical factors including exponential time-varying demand, consistent holding costs, and partial backlog management. The model's objective is to find an equilibrium, optimizing inventory expenses while maintaining sufficient stock to fulfil customer needs. By incorporating these key elements, businesses can enhance their inventory management strategies to adapt to changing market conditions and improve overall operational efficiency. Through analytical insights and numerical simulations, this research provides valuable guidance for decision-makers in optimizing inventory policies for perishable goods.