IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v209y2019icp274-284.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527317302335
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2017.07.016?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Qin, Yiyan & Wang, Jianjun & Wei, Caimin, 2014. "Joint pricing and inventory control for fresh produce and foods with quality and physical quantity deteriorating simultaneously," International Journal of Production Economics, Elsevier, vol. 152(C), pages 42-48.
    2. van Donselaar, K. & van Woensel, T. & Broekmeulen, R. & Fransoo, J., 2006. "Inventory control of perishables in supermarkets," International Journal of Production Economics, Elsevier, vol. 104(2), pages 462-472, December.
    3. Berk, Emre & Gürler, Ülkü & YIldIrIm, Gonca, 2009. "On pricing of perishable assets with menu costs," International Journal of Production Economics, Elsevier, vol. 121(2), pages 678-699, October.
    4. Rabbani, Masoud & Pourmohammad Zia, Nadia & Rafiei, Hamed, 2016. "Joint optimal dynamic pricing and replenishment policies for items with simultaneous quality and physical quantity deterioration," Applied Mathematics and Computation, Elsevier, vol. 287, pages 149-160.
    5. Wang, Xiaojun & Li, Dong, 2012. "A dynamic product quality evaluation based pricing model for perishable food supply chains," Omega, Elsevier, vol. 40(6), pages 906-917.
    6. Wen Zhao & Yu-Sheng Zheng, 2000. "Optimal Dynamic Pricing for Perishable Assets with Nonhomogeneous Demand," Management Science, INFORMS, vol. 46(3), pages 375-388, March.
    7. Transchel, Sandra & Minner, Stefan, 2009. "Dynamic pricing and replenishment in the warehouse scheduling problem--A common cycle approach," International Journal of Production Economics, Elsevier, vol. 118(1), pages 331-338, March.
    8. Zhang, Jianxiong & Wang, Yu & Lu, Lihao & Tang, Wansheng, 2015. "Optimal dynamic pricing and replenishment cycle for non-instantaneous deterioration items with inventory-level-dependent demand," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 136-145.
    9. Michael Ketzenberg & Jacqueline Bloemhof & Gary Gaukler, 2015. "Managing Perishables with Time and Temperature History," Production and Operations Management, Production and Operations Management Society, vol. 24(1), pages 54-70, January.
    10. Haijema, René & Minner, Stefan, 2016. "Stock-level dependent ordering of perishables: A comparison of hybrid base-stock and constant order policies," International Journal of Production Economics, Elsevier, vol. 181(PA), pages 215-225.
    11. Bakker, Monique & Riezebos, Jan & Teunter, Ruud H., 2012. "Review of inventory systems with deterioration since 2001," European Journal of Operational Research, Elsevier, vol. 221(2), pages 275-284.
    12. Avinadav, Tal & Herbon, Avi & Spiegel, Uriel, 2013. "Optimal inventory policy for a perishable item with demand function sensitive to price and time," International Journal of Production Economics, Elsevier, vol. 144(2), pages 497-506.
    13. Chew, Ek Peng & Lee, Chulung & Liu, Rujing & Hong, Ki-sung & Zhang, Anming, 2014. "Optimal dynamic pricing and ordering decisions for perishable products," International Journal of Production Economics, Elsevier, vol. 157(C), pages 39-48.
    14. Wedad Elmaghraby & P{i}nar Keskinocak, 2003. "Dynamic Pricing in the Presence of Inventory Considerations: Research Overview, Current Practices, and Future Directions," Management Science, INFORMS, vol. 49(10), pages 1287-1309, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kabadurmus, Ozgur & Kayikci, Yaşanur & Demir, Sercan & Koc, Basar, 2023. "A data-driven decision support system with smart packaging in grocery store supply chains during outbreaks," Socio-Economic Planning Sciences, Elsevier, vol. 85(C).
    2. 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.
    3. Helen Rogers & Mohit Srivastava, 2021. "Emerging Sustainable Supply Chain Models for 3D Food Printing," Sustainability, MDPI, vol. 13(21), pages 1-18, November.
    4. Hongliang Li & Jun Liu & Jiangjie Qiu & Yunsen Zhou & Xu Zhang & Yuming Wang & Wei Guo, 2024. "ARIMA-Driven Vegetable Pricing and Restocking Strategy for Dual Optimization of Freshness and Profitability in Supermarket Perishables," Sustainability, MDPI, vol. 16(10), pages 1-26, May.
    5. Konrád Kiss & Csaba Ruszkai & Katalin Takács-György, 2019. "Examination of Short Supply Chains Based on Circular Economy and Sustainability Aspects," Resources, MDPI, vol. 8(4), pages 1-21, September.
    6. 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.
    7. 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.
    8. Lena Riesenegger & Alexander Hübner, 2022. "Reducing Food Waste at Retail Stores—An Explorative Study," Sustainability, MDPI, vol. 14(5), pages 1-21, February.
    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.
    10. 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.
    11. Jaekwon Chung, 2019. "Effective Pricing of Perishables for a More Sustainable Retail Food Market," Sustainability, MDPI, vol. 11(17), pages 1-16, August.
    12. Biswas, Debajyoti & Rezaee Vessal, Sara, 2024. "Smart home insurance: Collaboration and pricing," European Journal of Operational Research, Elsevier, vol. 314(1), pages 176-205.
    13. Noelia S. Bedoya-Perales & Glenio Piran Dal’ Magro, 2021. "Quantification of Food Losses and Waste in Peru: A Mass Flow Analysis along the Food Supply Chain," Sustainability, MDPI, vol. 13(5), pages 1-15, March.
    14. Sina Davoudi & Peter Stasinopoulos & Nirajan Shiwakoti, 2024. "Two Decades of Advancements in Cold Supply Chain Logistics for Reducing Food Waste: A Review with Focus on the Meat Industry," Sustainability, MDPI, vol. 16(16), pages 1-67, August.
    15. Santos, Maria João & Martins, Sara & Amorim, Pedro & Almada-Lobo, Bernardo, 2022. "On the impact of adjusting the minimum life on receipt (MLOR) criterion in food supply chains," Omega, Elsevier, vol. 112(C).
    16. 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).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Qi Chen & Qi Xu & Wenjie Wang, 2019. "Optimal Policies for the Pricing and Replenishment of Fashion Apparel considering the Effect of Fashion Level," Complexity, Hindawi, vol. 2019, pages 1-12, February.
    2. Janssen, Larissa & Claus, Thorsten & Sauer, Jürgen, 2016. "Literature review of deteriorating inventory models by key topics from 2012 to 2015," International Journal of Production Economics, Elsevier, vol. 182(C), pages 86-112.
    3. Dong Li & Xiaojun Wang, 2017. "Dynamic supply chain decisions based on networked sensor data: an application in the chilled food retail chain," International Journal of Production Research, Taylor & Francis Journals, vol. 55(17), pages 5127-5141, September.
    4. Mou, Shandong & Robb, David J. & DeHoratius, Nicole, 2018. "Retail store operations: Literature review and research directions," European Journal of Operational Research, Elsevier, vol. 265(2), pages 399-422.
    5. 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.
    6. Pırıl Tekin & Rızvan Erol, 2017. "A New Dynamic Pricing Model for the Effective Sustainability of Perishable Product Life Cycle," Sustainability, MDPI, vol. 9(8), pages 1-22, July.
    7. Tong, Tingting & Dai, Hongyan & Xiao, Qin & Yan, Nina, 2020. "Will dynamic pricing outperform? Theoretical analysis and empirical evidence from O2O on-demand food service market," International Journal of Production Economics, Elsevier, vol. 219(C), pages 375-385.
    8. Maryam Ghoreishi, 2019. "Testing the robustness of deterministic models of optimal dynamic pricing and lot-sizing for deteriorating items under stochastic conditions," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 27(4), pages 1131-1152, December.
    9. Chen, Jing & Dong, Ming & Rong, Ying & Yang, Liang, 2018. "Dynamic pricing for deteriorating products with menu cost," Omega, Elsevier, vol. 75(C), pages 13-26.
    10. Hansen, Ole & Transchel, Sandra & Friedrich, Hanno, 2023. "Replenishment strategies for lost sales inventory systems of perishables under demand and lead time uncertainty," European Journal of Operational Research, Elsevier, vol. 308(2), pages 661-675.
    11. Alamri, Adel A. & Syntetos, Aris A., 2018. "Beyond LIFO and FIFO: Exploring an Allocation-In-Fraction-Out (AIFO) policy in a two-warehouse inventory model," International Journal of Production Economics, Elsevier, vol. 206(C), pages 33-45.
    12. Zhang, Jianxiong & Wang, Yu & Lu, Lihao & Tang, Wansheng, 2015. "Optimal dynamic pricing and replenishment cycle for non-instantaneous deterioration items with inventory-level-dependent demand," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 136-145.
    13. Herbon, Avi & Khmelnitsky, Eugene, 2017. "Optimal dynamic pricing and ordering of a perishable product under additive effects of price and time on demand," European Journal of Operational Research, Elsevier, vol. 260(2), pages 546-556.
    14. Avinadav, Tal, 2020. "The effect of decision rights allocation on a supply chain of perishable products under a revenue-sharing contract," International Journal of Production Economics, Elsevier, vol. 225(C).
    15. Miao, Jie & Liu, Aijun & Wang, Ruiyao & Lu, Hui, 2022. "The influence of information asymmetry on the strategic inventory of deteriorating commodity," Omega, Elsevier, vol. 107(C).
    16. Chernonog, Tatyana, 2020. "Inventory and marketing policy in a supply chain of a perishable product," International Journal of Production Economics, Elsevier, vol. 219(C), pages 259-274.
    17. Chernonog, Tatyana & Avinadav, Tal, 2019. "Pricing and advertising in a supply chain of perishable products under asymmetric information," International Journal of Production Economics, Elsevier, vol. 209(C), pages 249-264.
    18. Dilupa Nakandala & Henry Lau & Paul K.C. Shum, 2017. "A lateral transshipment model for perishable inventory management," International Journal of Production Research, Taylor & Francis Journals, vol. 55(18), pages 5341-5354, September.
    19. Onur Kaya & Sajjad Rahimi Ghahroodi, 2018. "Inventory control and pricing for perishable products under age and price dependent stochastic demand," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 88(1), pages 1-35, August.
    20. Kouki, Chaaben & Jouini, Oualid, 2015. "On the effect of lifetime variability on the performance of inventory systems," International Journal of Production Economics, Elsevier, vol. 167(C), pages 23-34.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:209:y:2019:i:c:p:274-284. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.