Multi-period pricing and order decisions for fresh produce with option contracts

Xingyu Chen, Chong Wang (), Deng Jia and Yujia Bai
Additional contact information
Xingyu Chen: Sichuan Agricultural University
Chong Wang: Sichuan Agricultural University
Deng Jia: Sichuan Agricultural University
Yujia Bai: Sichuan Agricultural University

Annals of Operations Research, 2024, vol. 335, issue 1, No 4, 79-110

Abstract: Abstract With the construction of a multi-period newsvendor model, this study examines the ordering behaviour and pricing decisions of a fresh produce firm. The firm ordered the fresh produce via a wholesale price contract and option contract to determine the optimal preliminary order quantity, option order quantity, and retail pricing when faced with price-dependent random demand. We first determine the optimal decision that could be made through the use of the single-period model. The results revealed that the firm’s retail price, option order quantity and total order quantity all increased in the circulation loss rate. In contrast, the preliminary order quantity was found to decrease in the circulation loss rate. In the multi-period model, the retail price and total order quantity were unaffected by the price difference between the regular and concessionary prices, while an increase in the price difference caused an increase in the option order quantity and decrease in the preliminary order quantity in the previous period. Further, a lower discount factor for the concessionary price than for the regular price did not have as much of an effect on the retail price and total order quantity, while a rise in the discount factor led to a fall in the option order quantity as well as a rise in the preliminary order quantity in the previous period.

Keywords: Supply chain management; Pricing and order decisions; Multi-period; Fresh produce; Option contracts (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10479-023-05515-y Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:annopr:v:335:y:2024:i:1:d:10.1007_s10479-023-05515-y

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-023-05515-y

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().