Commercial delivery policies: inventory management models with power demand pattern

Abstract

In the fast-paced, ever-changing environment of contemporary business, inventory management stands as a vital, ongoing endeavor. The discipline of decision-making in inventory management assumes a central role in this dynamic environment that is marked by continuous change and intense competition. Navigating the complexities of decision-making poses challenges, particularly in accurately assessing the multifaceted aspects of decision-making processes amid varying circumstances, including demand fluctuations, different types of discounts, and contractual agreements. At the same time, the increasing concern among consumers regarding the environmental footprint of their purchases, coupled with government-mandated regulations, complicates the decision-making process for businesses. In this milieu, sustainable inventory management practices have emerged as a pertinent research area, prompting heightened scrutiny of the impacts of emission guidelines on inventory practices, not only aimed at addressing broader societal concerns but also at ensuring the financial sustainability of businesses. This thesis adopts a specialized demand structure known as the power demand pattern (PDP) to depict fluctuations in demand over the storage period of a company, providing a robust framework for understanding customer demand dynamics across various products. The company maintains its inventory by acquiring items through quantity discounts in exchange for a quantity-sensitive prepayment as part of a contractual arrangement. This thesis introduces a novel concept by considering the installment frequency for fulfilling prepayment obligations as a decision variable for the company, incorporating a transaction fee for each installment. Furthermore, theoretical formulas are developed under different sorts of demand structures, incorporating the influences of selling price and storage time, to assess the profitability of inventory management processes under a combined link-to-order prepayment and quantity discount scheme. A significant advancement by integrating sustainability considerations into both inventory management and pricing strategies within the framework of the PDP is accomplished in this thesis. Through systematic identification and comparison of sustainable inventory management practices under varying emission guidelines, this study provides valuable insights aimed at optimizing profits within the PDP. Therefore, the insights derived from this study offer organizations practical techniques to navigate the complex regulatory environment effectively and achieve sustainable financial performance. Moreover, intensive and comprehensive in-depth sustainable inventory practices under the PDP are established specifically for growing items (GIs). This thesis investigates the impact of weight loss resulting from bleeding and non-consumable components on optimal pricing and inventory strategies for a farm, delving into previously unexplored areas within the literature on GIs. A comparative analysis is conducted on the operations of a livestock farm, operating within several environmental regulations. Consequently, the comprehensive methodology improves sustainable inventory management techniques and offers practical strategies to mitigate environmental impacts and enhance economic feasibility in livestock production.