Developing an Optimized Pricing Mechanism for Super Fresh Products considering product shelf-life

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Authors

1 Department of Industrial Engineering, South Tehran Branch, Islamic Azad University, Tehran, ‎Iran

2 School of Industrial Engineering, Iran University of Science and Technology

3 Department of industrial Engineering, Faculty of Engineering, KHATAM University, Tehran, Iran

Abstract

This study aims to develop a mathematical model for the pricing of fresh products in a ‎fruit supply chain network. Stakeholders in this issue include fruit suppliers, primary fruit fields ‎and markets, retailers, end customers, processing industries, and disposal centers. Fruits and ‎vegetables are considered super fresh products because their color and taste change over time, ‎leading to spoilage. This article focuses on pricing this category of products considering ‎freshness-dependent demand and pricing and models the flow among suppliers, retailers, ‎customers, processing industries, and disposals. This study examines the pricing of fresh products ‎supplied by suppliers, transported, sold by retailers, and eventually delivered to customers and ‎processing industries and disposals, and considers multiple periods. The developed model uses ‎mixed integer linear programming (MILP) to maximize total profit, including transportation, ‎wholesale, and inspection costs. A numerical example is provided to validate the proposed model ‎and offer managerial insights to the relevant industry. The results indicate that appropriate ‎pricing contributes to overall profit and increased sales. Lastly, sensitivity analysis demonstrates ‎the relationship between total profit, freshness, and product sales. A total profit model for ‎retailers is considered to optimize pricing based on optimal cost parameters.‎

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Advances in Industrial Engineering

Articles in Press, Accepted Manuscript
Available Online from 26 October 2024

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