Optimal Ordering Strategy For Fresh Products Under Consumer Classification

In the fresh product market,consumers would be divided into three types based on their preferences for the product prices and quality.When the product freshness falls,some quality-preferred consumers will leave.In order to retain these consumers,fresh product retailers consider adopting fresh-keeping measures to slow down product quality degradation.Retailers are more inclined to partially preserve the product due to the limited fresh-keeping cost budget and space restrictions for fresh-keeping facilities.At the same time,in order to attract price-preferred consumers,retailers will discount sales for low-quality products.After a certain period of time,Fresh-keeping products with higher freshness will cannibalize a part of demand for the stale products,which is not been preserved.This study starts with the consideration of consumer preferences,established a deterministic demand inventory model related to product price,time-varying freshness,and consumer classification.Discussed the retailers optimal ordering strategy(order cycle,order quantity)and preservation technology investment(preservation intensity,preservation ratio).Firstly,we set up retailer’s inventory models under the three modes of non-preservation,partial preservation,and full preservation separately,according to the retailers’ different preservation strategies,and then analyzed the nature of these inventory models.Secondly,we analyzed the sensitivity of each parameter in the model using numerical analysis methods.Specifically,explored the product freshness decaying rate and the consumer classification how to influence the retailer’s order and profit when the preservation strategy is not adopted.When the freshness is partially maintained,the focus is on the choice of retailer’s freshness preservation intensity and preservation ratio.In case of completely preservation,we compared the retailer’s order quantity and profit with the former two preservation modes.The findings are as follows:(1)Whether the retailer preserve the product or not,the retailer’s order cycle will be prolonged along with the decrease of the product freshness decaying rate,and the order quantity will increase first and then decrease.The trend of profit changes cannot be determined,mainly related to consumer classification.(2)The increase of the demand cannibalization coefficient has basically no effect on the retailer’s optimal order cycle,but it will reduce the retailer’s optimal order quantity.(3)The preservation investment can significantly shorten the optimal order cycle.Compared with the non-preservation,the lower fresh-keeping intensity can result in a considerable increase in the retailer’s order quantity and profit.However,if the preservation effort continues to increase,the retailer’s order quantity and profit will rapidly decrease,even lower than the non-preservation’s situation.In comparison to the effect of preservation intensity,the fluctuation of the target function caused by the change of preservation ratio is very small.This research has a certain guiding significance for fresh product retailer’s inventory management and preservation technology investment decision-making.