Deep-Processing Service and Pricing Decisions for Fresh Products with the Rate of Deterioration

Qingren He, Shuting Li, Fei Xu and Wanhua Qiu
Additional contact information
Qingren He: School of Management, Guizhou University, Guiyang 550025, China
Shuting Li: School of Management, Guizhou University, Guiyang 550025, China
Fei Xu: School of Management, Guizhou University, Guiyang 550025, China
Wanhua Qiu: School of Economics and Management, Beihang University, Beijing 100191, China

Mathematics, 2022, vol. 10, issue 5, 1-19

Abstract: The mismatch between supply and demand for fresh products and those that can potentially lead to the risk of spoilage has posed huge losses for industrial companies. To reduce the risk of spoilage of fresh products, some firms have attempted to adopt a deep-processing service to alleviate the imbalance. Therefore, we developed a framework to control the spoilage of the product by taking into account the deep-processing service. First, a differential equation for an inventory model of fresh product and deep-processed product that depended on the selling price and the deteriorating rate was developed. Based on this, a profit model for fresh product and the deep-processed product was developed, and the condition of whether the deep-processing service was required was shown by optimization theory. Furthermore, the existence and its uniqueness of such proportion of deep processing and the selling price of the fresh product were proved. Research results showed the deep-processing service acted as a buffer against the mismatch between the supply and demand for the fresh product. Industrial companies should make lower profits but a quicker turnover by setting a lower selling price when both the deteriorating rate and initial freshness level are high, and vice versa.

Keywords: deep-processing service; pricing; fresh product; rate of deterioration (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2227-7390/10/5/745/pdf (application/pdf)
https://www.mdpi.com/2227-7390/10/5/745/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jmathe:v:10:y:2022:i:5:p:745-:d:759350

Access Statistics for this article

Mathematics is currently edited by Ms. Emma He

More articles in Mathematics from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().