92. Managing Food Waste: Pricing Strategies for Food Re-distribution Restaurants
Invited abstract in session MC-29: Pricing Strategies in Food & Service Platforms, stream Pricing and Revenue Management Innovations.
Monday, 12:30-14:00Room: Maurice Keyworth 1.04
Authors (first author is the speaker)
| 1. | Priyanka Laskar
|
| Quantitative Methods & Operations Management, Indian Institute of Management Kozhikode | |
| 2. | Soumyadeep Kundu
|
| School of Management, BML Munjal University |
Abstract
Food-sharing platforms, like Too Good to Go, offer a novel way of dealing with surplus food, connecting restaurants with consumers to distribute this surplus food at a considerably discounted price through the sale of "surprise bags". For consumers, the surprise element is introduced in the form of uncertainty about the contents of these bags, which intrigues consumers, thus requiring them to rely solely on the perceived quality of the restaurant. To keep pricing simple and attract more buyers, restaurants use fixed discount rates like 50% or 33%, avoiding the complexity of setting variable prices. We thus develop a game-theoretic model to explore the restaurant's optimal pricing strategy for these surprise bags and determine the quantity of surprise bags to offer over a period, while maximizing the revenue for the restaurant from the sale of these surprise bags. In addition, we also examine how competition among restaurants, listed on these food-sharing platforms affects these dynamics. Our study incorporates the uncertainty arising from these surprise bags, the perception of quality among consumers, and competition among restaurants, examining how such factors influence the pricing and quantity decision on the number of surprise bags offered by the restaurants. The study provides actionable insights for restaurants to better deal with such food-sharing platforms, including pricing and other operational decisions, all the while reducing food waste and benefiting consumers.
Keywords
- Revenue Management and Pricing
- Game Theory
- Supply Chain Management
Status: accepted
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