Optimal Issuing Policies for Substitutable Fresh Agricultural Products under Equal Ordering Policy

Abstract

Small fresh agricultural products retailers often adopt equal ordering policy. Demand for the old fresh agricultural products and the new is described by consumer choice which is analyzed with price and freshness. Assuming that the market capacity is known and taking substitution of demand for the old and new fresh agricultural products into account, we establish LIFO and FIFO inventory models. To find the thresholds of freshness, price and the substitution probability, we give the suggestion about optimal issuing policy. This study helps small fresh agricultural products retailers to optimize their issuing policies.