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The Retail Chain Design for Perishable Food: The Case of Price Strategy and Shelf Space Allocation

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  • Yujie Xiao

    (Jiangsu Key Laboratory of Modern Logistics, School of Marketing and Logistic Management, Nanjing University of Finance and Economics, Nanjing 210046, China
    Business School, Nanjing University, Nanjing 210093, China)

  • Shuai Yang

    (School of Economics and Management, Changshu Institute of Technology, Changshu 215500, China)

Abstract

Managing perishable food in a retail store is quite difficult because of the product’s short lifetime and deterioration. Many elements, such as price, shelf space allocation, and quality, which can affect the consumption rate, should be taken into account when the perishable food retail chain is designed. The modern tracking technologies provide good opportunities to improve the management of the perishable food retail chain. In this research, we develop a mathematical model for a single-item retail chain and determine the pricing strategy, shelf space allocation, and order quantity to maximize the retailer’s total profit with the application of tracking technologies. Then the single-item retail chain is extended into a multi-item one with a shelf space capacity and a simple algorithm is developed to find the optimal allocation of shelf space among these items. Finally, numerical experiments and real-life examples are conducted to illustrate the proposed models.

Suggested Citation

  • Yujie Xiao & Shuai Yang, 2016. "The Retail Chain Design for Perishable Food: The Case of Price Strategy and Shelf Space Allocation," Sustainability, MDPI, vol. 9(1), pages 1-11, December.
    • Handle: RePEc:gam:jsusta:v:9:y:2016:i:1:p:12-:d:86009
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    References listed on IDEAS

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    Cited by:

    1. Linh N. K. Duong & Lincoln C. Wood & William Y. C. Wang, 2018. "Effects of Consumer Demand, Product Lifetime, and Substitution Ratio on Perishable Inventory Management," Sustainability, MDPI, vol. 10(5), pages 1-17, May.
    2. Shuai Zhao & Xiaoning Cao, 2024. "Sustainable Suppliers-to-Consumers’ Sales Mode Selection for Perishable Goods Considering the Blockchain-Based Tracking System," Sustainability, MDPI, vol. 16(8), pages 1-32, April.
    3. Bedru B. Balana & Crystal N. Aghadi & Adebayo I. Ogunniyi, 2022. "Improving livelihoods through postharvest loss management: evidence from Nigeria," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(1), pages 249-265, February.

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