A dynamic product quality evaluation based pricing model for perishable food supply chains

Waste stemmed from inappropriate quality control and excessive inventories is a major challenge for perishable food management in grocery retail chains. Improvement of visibility and traceability in food supply chains facilitated by tracking and tracing technologies has great potential to improve operations efficiency. This research aims to reduce food spoilage waste and maximise food retailer's profit through a pricing approach based on dynamically identified food shelf life. The proposed model is evaluated through different pricing policies to exploit the benefits from utilising accurate product shelf life information captured through innovated tracking and monitoring technologies. Numerical analysis is conducted in an illustrative case study.

► We propose a pricing model based on dynamic quality evaluation. ► The pricing process is transformed into a more active manner to manage demand. ► We examine impacts of the accuracy of quality indicator on retailing performance. ► Timing and frequency of discount make a profound effect on the performance. ► Right pricing decisions reflecting quality feature are critical for the success.