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Discounting and dynamic shelf life to reduce fresh food waste at retailers

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  • Buisman, M.E.
  • Haijema, R.
  • Bloemhof-Ruwaard, J.M.

Abstract

Approximately 89 million of tonnes of food is wasted every year in the EU along the whole food supply chain. The reasons for food waste by retailers include inappropriate quality control, overstocking and inaccurate forecasting. This study shows that food wasted by retailers can be reduced by discounting old products or by applying a dynamically adjustable expiration date (in other words dynamic shelf life (DSL)). We developed a simulation based optimization model to optimize the replenishment and discounting policy of a retailer who sells meat products. DSL outperforms a fixed shelf life (FSL) in terms of profit, waste, shortages and food safety. Furthermore, replenishment quantities can be higher. The benefits of DSL are greater when demand is low or when the shelf life of products is short. Discounting is a successful strategy to reduce food waste for both FSL and DSL. DSL without discounting is more effective than FSL with discounting. Combining DSL and discounting, allows for a further reduction of food waste.

Suggested Citation

  • Buisman, M.E. & Haijema, R. & Bloemhof-Ruwaard, J.M., 2019. "Discounting and dynamic shelf life to reduce fresh food waste at retailers," International Journal of Production Economics, Elsevier, vol. 209(C), pages 274-284.
    • Handle: RePEc:eee:proeco:v:209:y:2019:i:c:p:274-284
    DOI: 10.1016/j.ijpe.2017.07.016
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    Cited by:

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    4. Timothy J. Richards & Stephen F. Hamilton, 2022. "Inventory management and loss in beer retailing," Agribusiness, John Wiley & Sons, Ltd., vol. 38(3), pages 461-485, July.
    5. Jaekwon Chung, 2019. "Effective Pricing of Perishables for a More Sustainable Retail Food Market," Sustainability, MDPI, vol. 11(17), pages 1-16, August.
    6. Wang, Haiyan & Zhan, Sha-lei & Ng, Chi To & Cheng, T.C.E., 2020. "Coordinating quality, time, and carbon emissions in perishable food production: A new technology integrating GERT and the Bayesian approach," International Journal of Production Economics, Elsevier, vol. 225(C).
    7. Izabela Karolina Horoś & Tonia Ruppenthal, 2021. "Avoidance of Food Waste from a Grocery Retail Store Owner’s Perspective," Sustainability, MDPI, vol. 13(2), pages 1-22, January.
    8. Beullens, Patrick & Ghiami, Yousef, 2022. "Waste reduction in the supply chain of a deteriorating food item – Impact of supply structure on retailer performance," European Journal of Operational Research, Elsevier, vol. 300(3), pages 1017-1034.
    9. Jakob Bogenreuther & Thomas Kastner & Felicitas Schneider & Thomas Koellner, 2024. "Biodiversity impact of food waste: Quantification for supply chain stages and products in Germany," Journal of Industrial Ecology, Yale University, vol. 28(2), pages 355-367, April.
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    14. Gaukler, Gary M. & Zuidwijk, Rob A. & Ketzenberg, Michael E., 2023. "The value of time and temperature history information for the distribution of perishables," European Journal of Operational Research, Elsevier, vol. 310(2), pages 627-639.
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