Mathematical modeling of inventory dynamics in a two-level supply chain with freshness constraints

Ajay Kumar Balmiki; Shilpi Jain; Govind Shay  Sharma; Saurabh Kumar  Gupta

doi:10.5269/bspm.76404

Ajay Kumar Balmiki Vivekananda Global University
Shilpi Jain Poornima College of Engineering
Govind Shay Sharma Vivekananda Global University
Saurabh Kumar Gupta Vivekananda Global University

Abstract

This paper explores the inventory dynamics of a two-level supply chain, where distribution centers supply fresh products to supermarkets while considering the impact of freshness degradation. We develop a mathematical model to analyze the inventory levels of a product at a distribution center over a supply interval, incorporating the coefficient of freshness decay, $\theta$. The study derives equations governing inventory changes, initial stock levels, and replenishment quantities. The results indicate how freshness degradation influences inventory replenishment requirements, helping optimize stock levels at supermarkets. A graphical analysis further illustrates the impact of key parameters on inventory management and profit margins.

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