Optimal pricing strategy for the perishable food supply chain

Xu Chen*, Shuyao Wu, Xiaojun Wang, Dong Li

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)peer-review

13 Citations (Scopus)
205 Downloads (Pure)

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.
Original languageEnglish
Pages (from-to)2755-2768
Number of pages14
JournalInternational Journal of Production Research
Volume57
Issue number9
Early online date13 Dec 2018
DOIs
Publication statusPublished - 3 May 2019

Keywords

  • perishable food
  • pricing strategy
  • supply chain coordination
  • supply chain management

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