The effect of adopting new storage methods for extending product validity periods on manufacturers expected inventory costs

Abstract

The validness of the expiration dates (validity period) that manufacturers provide on food product labels is a crucial food safety problem. Governments must study how to use their authority by implementing fair awards and punishments to prompt manufacturers into adopting rigorous considerations, such as the effect of adopting new storage methods for extending product validity periods on expected costs. Assuming that a manufacturer sells fresh food or drugs, this manufacturer must respond to current stochastic demands at each unit of time to determine the purchase amount of products for sale. If this decision maker is capable and an opportunity arises, new packaging methods (e.g., aluminum foil packaging, vacuum packaging, high-temperature sterilization after glass packaging, or packaging with various degrees of dryness) or storage methods (i.e., adding desiccants or various antioxidants) can be chosen to extend the validity periods of products. To minimize expected costs, this decision maker must be aware of the processing costs of new storage methods, inventory standards, inventory cycle lengths, and changes in relationships between factors such as stochastic demand functions in a cycle. Based on these changes in relationships, this study established a mathematical model as a basis for discussing the aforementioned topics.