Thursday 30 November – from 1:15pm to 2:15pm

“Pricing and assortment decisions for a deteriorating item under store and customer waste” 

Yann Bouchery, Associate Professor in Operations Management, KEDGE Business School 

Abstract:

The magnitude of household food waste is significant in developed countries and many on-going initiatives aim at tackling this issue. However, these initiatives often consider consumers’ behavior in separation of the upstream decisions in the supply chain. In this work, we aim at bridging the gap between the household food waste literature and the literature on inventory management of perishable items. We study a retailer that sells a deteriorating item to freshness- and price-sensitive customers. The store orders fresh items at the beginning of the selling season. The items deteriorate over time and they turn into old products before becoming improper for consumption. Customers decide to purchase fresh or old items at the store depending on prices, availability and wastage probability at home. We show that our model is a special type of assortment planning and pricing model under vertically differentiated demand. Besides, while we focus on profit maximization for the store and on utility maximization for the customers, we also evaluate the associated waste at the store and at home. This enables us to identify the most promising way to reduce global food waste.

Registration, please contact robin@em-lyon.com

Room learning lab Ecully campus