Warehouse Inventory Model for Perishable Items with Hybrid Demand and Trade Credit Policy

The retailer frequently leases an additional warehouse to avoid stockout situations. The mathematical framework for multiple warehouses handling decaying products within a retail setting is presented in this paper. The retailer discounts less-effective products when deterioration begins, encouraging customers to purchase them. This reduces waste and promotes a more sustainable approach towards inventory management. In addition to focusing on sustainable marketing strategies that support environmentally friendly products, the article explores the link between advertising, product pricing, and demand, emphasizing the considerable influence of promotions and price cuts. The study also discusses a trade credit policy, where the supplier grants the retailer a specified credit period for settling the account. The study aims to increase the store's operational efficiency and minimize overall costs by establishing global optimality for important decision factors such as credit period, storage capacity, and replenishment time. Numerical examples and sensitivity analyses for key factors are provided to explore the impact on the system's optimal total cost, along with managerial insights.