Ordering and Pricing Strategies for Fresh Products with Multiple Quality Levels Considering Consumer Utility

Peiqi Ma

School of Management, Jinan University, Guangzhou, China.

DOI: 10.4236/ajor.2015.53015                

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.

Keywords

Fresh Products, Consumer Utility, Multiple Quality Level, Pricing and Ordering

Conflicts of Interest

The authors declare no conflicts of interest.

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