Determining Discounts For Perishable Inventory

Abstract

In this paper, we develop a model to help manage prices of perishable products in a grocery store. We consider inventory on hand and proximity to expiration date as key decision variables. We also discuss the strategic importance of minimizing inventory that must be disposed of at a cost after the product expires. We also develop simple applied rules and highlight the benefits of using a dynamic pricing model to companies selling perishable products.