Inventory Management Strategies for Deteriorating Products
Summary
Inventory management for deteriorating products addresses the challenge of balancing supply against time-sensitive quality loss. Central strategies involve characterising product deterioration through deterministic or stochastic rates, and integrating preservation technologies—such as temperature control, coatings or modified atmospheres—to slow spoilage. Models typically optimise key decision variables: order or production quantities, replenishment cycles, pricing and investment in preservation. Demand is often treated as stock- or price-dependent, reflecting customer sensitivity to availability and cost. Supply-chain coordination emerges through trade-credit arrangements and multi-echelon collaboration, enabling risk sharing and cost allocation. Contemporary approaches incorporate sustainability considerations, embedding carbon-emission controls or green-technology investments into production-inventory frameworks. Optimisation techniques range from analytic closed-form solutions to metaheuristic algorithms, supported by sensitivity analyses to guide managerial insights. These strategies find application across food, pharmaceutical and chemical industries, where minimising waste, ensuring product integrity and meeting regulatory requirements are vital for economic and environmental performance.
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Inventory Management Strategies for Deteriorating Products publication trend
The graph below shows the total number of articles in inventory management strategies for deteriorating products across all publications each year (not limited to Nature Index journals).
Technical terms
Deterioration rate: The speed at which product quality or usability declines over time.
Economic Production Quantity (EPQ): A model to determine the optimal production lot size that minimises total inventory costs.
Trade-credit policy: A payment arrangement allowing buyers to delay payment for purchased goods.
Preservation technology: Methods or investments aimed at slowing product deterioration.
Carbon cap-and-trade: A market-based mechanism setting emission allowances and enabling trading between emitters.
Backordering: Accepting customer orders for out-of-stock items with commitment to later fulfilment.
Stock-dependent demand: Demand rate influenced by the current inventory level.
Price-dependent demand: Demand rate expressed as a function of selling price.
References
- A sustainable production inventory model with green technology investment for perishable products. Decision Analytics Journal (2023).
- Joint Pricing and Inventory Model for Deteriorating Items with Maximum Lifetime and Controllable Carbon Emissions under Permissible Delay in Payments. Mathematics (2021).
- Deteriorating inventory with preservation technology under price- and stock-sensitive demand. Journal of Industrial and Management Optimization (2020).
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