Abstract
In this paper, considering a scenario in which there are two quality levels of fresh products and introduction of consumer utility function, we studied the optimal ordering and pricing strategies under certain quantity. Our results showed that, facing the two quality levels of fresh products, retailers would not benefit from sales of lower quality of fresh products with the deterministic demand. In the pursuit of profit maximization, the initial order quantity is smaller than the potential demand for market.
Highlights
Given the technological advancements and logistical capabilities over the last seven decades or so, perishables have become a large part of supermarket retailing sales
In this paper, considering a scenario in which there are two quality levels of fresh products and introduction of consumer utility function, we studied the optimal ordering and pricing strategies under certain quantity
This paper focuses on multiple quality fresh products and considers consumer utility to analyze the retailer’s optimal ordering and pricing strategies
Summary
Given the technological advancements and logistical capabilities over the last seven decades or so, perishables have become a large part of supermarket retailing sales. Motivated by the common practice, retailers usually divide fresh products, which may decay or deteriorate during the sale process, into different quality levels, and sell them in a separate way. In this paper, considering a scenario in which there are two quality levels of fresh products and introduction of consumer utility function, we studied the optimal ordering and pricing strategies under certain quantity. (2015) Products with Multiple Quality Levels Considering Consumer Utility. Ma utility to study the optimal ordering and pricing decisions of multi-quality fresh products, we found corresponding answers of the above questions, and gave the management suggestions
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