975. Joint Pricing and Ordering to Reduce Food Waste Considering Strategic Consumers Behavior
Invited abstract in session TB-47: Avoiding Food Waste, stream Retail Operations.
Tuesday, 10:30-12:00Room: Parkinson B08
Authors (first author is the speaker)
| 1. | Geun Ho Yang
|
| Industrial Engineering, Yonsei University | |
| 2. | Byung Do Chung
|
| Industrial Engineering, Yonsei University |
Abstract
Retailers in the food supply chain struggle to manage inventory efficiently due to perishability and short shelf life. Dynamic pricing is one of the alternatives to address this challenge, as it helps control demand by considering the decreasing valuation of the product. However, overlooking strategic customer behavior in dynamic pricing may lead to significant losses for retailers. Accordingly, this study addresses the problem of joint three-period pricing and inventory management considering the strategic customer. To the best of our knowledge, this study is the first to address this problem under endogenous stochastic demand. Given the potential non-concavity of the problem, we propose a heuristic algorithm to improve computational efficiency. In numerical experiments under various scenarios, the proposed algorithm demonstrates faster computation and comparable optimal profit relative to an exhaustive search-based algorithm. Furthermore, our findings confirm that the joint pricing and inventory management approach effectively improves profit and reduces food waste.
Keywords
- Revenue Management and Pricing
- Inventory
- Stochastic Optimization
Status: accepted
Back to the list of papers