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Optimal pricing strategy for the perishable food supply chain

Author

Listed:
  • Xu Chen
  • Shuyao Wu
  • Xiaojun Wang
  • Dong Li

Abstract

This research investigates the optimal pricing strategy for the perishable food supply chain. Using the setting of a two-echelon supply chain including a supplier and a retailer, we apply the game theory approach to derive the equilibriums for both a single pricing strategy and a two-stage pricing strategy. Through a comparison of the equilibriums, we explore how the two pricing strategies affect the supply chain’s decisions and supplier’s and retailer’s performance individually and collectively. The results of the analysis show that the optimal choice of pricing strategy depends on the price markdown cost and its relationship with the two critical thresholds that are determined by a combination of factors including the potential market size, the price and quality sensitivity factors, the initial quality, the unit product cost, and the quality deterioration rate.

Suggested Citation

  • Xu Chen & Shuyao Wu & Xiaojun Wang & Dong Li, 2019. "Optimal pricing strategy for the perishable food supply chain," International Journal of Production Research, Taylor & Francis Journals, vol. 57(9), pages 2755-2768, May.
    • Handle: RePEc:taf:tprsxx:v:57:y:2019:i:9:p:2755-2768
    DOI: 10.1080/00207543.2018.1557352
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    Cited by:

    1. Jiaguo Liu & Huida Zhao & Yibing Lyu & Xiaohang Yue, 2023. "The provision strategy of blockchain service under the supply chain with downstream competition," Annals of Operations Research, Springer, vol. 327(1), pages 375-400, August.
    2. C. K. Sivashankari & R. Valarmathi, 2023. "Optimal pricing and production lot-size policies in imperfect production system with price-sensitive demand, reworking, scrap, and sales return," Operational Research, Springer, vol. 23(3), pages 1-28, September.
    3. Fatemi, Maedeh S. & Ghodratnama, Ali & Tavakkoli-Moghaddam, Reza & Kaboli, Amin, 2022. "A multi-functional tri-objective mathematical model for the pharmaceutical supply chain considering congestion of drugs in factories," Research in Transportation Economics, Elsevier, vol. 92(C).
    4. Mohamed Ben-Daya & Elkafi Hassini & Zied Bahroun & Hafsa Saeed, 2023. "Optimal pricing in the presence of IoT investment and quality-dependent demand," Annals of Operations Research, Springer, vol. 324(1), pages 869-892, May.
    5. Yu, Yanan & He, Yong & Guo, Xiaotong & Li, Dong & Huang, Hongfu, 2024. "Quality disclosure strategy with asymmetric demand information in food supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 183(C).
    6. Yida Zhai & Guanghua Han, 2022. "The effect of the inspection information sharing policy on quality‐oriented food production in online commerce," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(1), pages 84-96, January.
    7. Syed Asif Raza, 2022. "A bibliometric analysis of pricing models in supply chain," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(2), pages 228-251, April.
    8. Ajay Philip & Rahul R. Marathe, 2022. "A New Green Labeling Scheme for Agri-Food Supply Chains: Equilibrium and Information Sharing under Uncertainties," Sustainability, MDPI, vol. 14(23), pages 1-34, November.
    9. Shi‐Woei Lin & Januardi, 2023. "Two‐stage pricing of perishable food supply chain with quality‐keeping and waste reduction efforts," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1749-1766, April.

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