This dissertation addresses the critical issue of perishable food waste in the retail sector, aiming to contribute to broader economic, environmental, and social goals, including the UN’s Sustainable Development Goal of “Zero Hunger”.
Employing a multi-method research approach, the study initially uses qualitative interviews with industry professionals across three countries to understand prevailing practices in perishable inventory management. It identifies key challenges such as stock-outs, overstocking, and lack of uniform discounting policies and explores strategies for waste reduction, including the prevalent but inconsistently implemented strategy of price discounting. To delve deeper into the discounting aspect, the study employs a quantitative simulation model based on the Joint Pricing and Replenishment (JPR) policy for a single perishable item at a single retail location under non-stationary stochastic demand conditions. The model employs the (R, s, S) inventory policy, widely used in the retail industry, to provide data-driven guidelines.
One of the most significant findings is the identification of specific ‘sweet spots’ for discount rates and durations that can help retailers minimise waste while maximising profit. These optimal bands were found to be consistent across various demand scenarios. The study also discusses its limitations and suggests avenues for future research, including the incorporation of real-world data and further computational advancements.
Overall, the dissertation offers both theoretical and practical contributions, providing nuanced insights into perishable inventory management and discounting strategies in the retail sector.
08 February 2024