A model for integrating shipment consolidation and pricing decisions in perishable product supply chains

Abstract

This paper focuses on a simple perishable product supply chain with a vendor and multiple retailers. These retailers, densely dispersed in a distribution zone, are sensitive to price, delivery time and product quality. With the aim of optimizing vendor's average expected profit during a shipment consolidation cycle, an analytical model is proposed for this problem. The upper unbound expressions of optimal time policy and fresh-keeping cost are given based on a certain range of time parameter. Then our theoretical findings are verified by using a numerical case. Some useful managerial insights are obtained based on analyzing the sensitivity of this model on major parameters.