Abstract

The study presents the dynamic pricing based on the consumer demand characteristics for fresh foods’ retailers. Demand is classified by consumers’ sensitivity to price and freshness of fresh products. Fresh product is classified by its length of shelf life. The model is based on the periodic inspection inventory model and considers consumers’ choice behavior in mixed model of First in First Out (FIFO) and Last in First Out (LIFO). We formulate the demand function that is related to retail price and instantaneous inventory level. The retail price and the maximum instantaneous inventory at the beginning of unit period are decision variables. Next we analyze five different kinds of demand behaviors and explore different sensitivities to price and freshness in different behaviors when other parameters that influence demand are the same. Finally, we conclude that pricing should vary from different demand behaviors.

Keywords:

Dynamic pricing, demand type, freshness, inventory level,

References

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Competing interests

The authors have no competing interests.

Open Access Policy

This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.

Copyright

The authors have no competing interests.