Comprehensive model for optimal management of perishable goods incorporating nonlinear carrying costs, learning effects and expiration dates

In today's dynamic market, the demand for fresh produce is surging, driven by factors such as the freshness index, shelf space allocation, selling prices, and expiration dates. This study delves into the market demand's intricate dynamics, positing a quadratic period function as its foundation. Key influencers include freshness index, selling price, shelf space allocation, and expiration date. At the conclusion of the replenishment cycle, maintaining a higher stock level proves advantageous. This article employs a nonlinear analytical approach, incorporating time and stock quantity, to assess the demand rate, learning effects, and carrying costs. To enhance a retailer's profitability margin, a novel strategy is presented, utilising classical optimisation techniques. The derived model is substantiated through a numerical illustration and sensitivity analysis, offering valuable managerial insights by showcasing the concave nature of the profit function through negative definiteness of the Hessian matrix.