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


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.

Share and Cite:

Ma, P. (2015) Ordering and Pricing Strategies for Fresh Products with Multiple Quality Levels Considering Consumer Utility. American Journal of Operations Research, 5, 192-198. doi: 10.4236/ajor.2015.53015.

Conflicts of Interest

The authors declare no conflicts of interest.


[1] Goyal, S.K. and Giri, B.C. (2001) Recent Trends in Modeling of Deteriorating Inventory. European Journal of Operational Research, 134, 1-16.
[2] Li, R., Lan, H. and Mawhinney, J.R. (2010) A Review on Deteriorating Inventory Study. Journal of Service Science and Management, 3, 117-129.
[3] Bakker, M., Riezebos, J. and Teunter, R.H. (2012) Review of Inventory Systems with Deterioration since 2001. European Journal of Operational Research, 221, 275-284.
[4] Xiao, Y., Wu, P. and Wang, Y. (2010) Pricing Strategies for Fresh Products with Multiple Quality Levels Based on Customer Choice Behavior. Chinese Journal of Management Science, 18, 58-65.
[5] Bai, R. and Kendall, G. (2008) A Model for Fresh Produce Shelf-Space Allocation and Inventory Management with Freshness-Condition-Dependent Demand. INFORMS Journal on Computing, 20, 78-85.
[6] Tal, A. and Teijo, A. (2009) An EOQ Model for Items with a Fixed Shelf-Life and a Declining Demand Rate Based on Time-to-Expiry Technical Note. Asia-Pacific Journal of Operational Research, 26, 759-767.
[7] Dan, B. and Chen, J. (2008) Coordinating Fresh Agricultural Supply Chain under the Valuable Loss. Chinese Journal of Management Science, 5, 6.
[8] Cai, X., Chen, J., Xiao, Y., et al. (2010) Optimization and Coordination of Fresh Product Supply Chains with Freshness-Keeping Effort. Production and Operations Management, 19, 261-278.
[9] Ferguson, M.E. and Koenigsberg, O. (2007) How Should a Firm Manage Deteriorating Inventory? Production and Operations Management, 16, 306-321.
[10] Akcay, Y., Natarajan, H.P. and Xu, S.H. (2010) Joint Dynamic Pricing of Multiple Perishable Products under Consumer Choice. Management Science, 56, 1345-1361.
[11] Li, Y., Cheang, B. and Lim A. (2012) Grocery Perishables Management. Production and Operations Management, 21, 504-517.
[12] Sainathan, A. (2013) Pricing and Replenishment of Competing Perishable Product Variants under Dynamic Demand Substitution. Production and Operations Management, 22, 1157-1181.

Copyright © 2023 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.