(A) marketing scheme for perishable items sold from two bins

Abstract

In this thesis, we deal with two different bins selling single perishable product. The fresh items are sold at a list price in the primary bin and after their allowed age at the primary bin the leftovers are transferred to the secondary bin and sold at a discount price to stimulate the demand. We assume that demand is a function of inventory levels as well as price where the demand rate of one bin is influenced by the pricing policy of the other bin. With the objective of maximizing the profit, mathematical models with LIFO policy are developed. There are three decision variables, the reduced price in the secondary bin, allowed age at the primary bin, and order quantities at the primary bin. Tabu search algorithm is developed to solve the model.