Joint decisions of shipment consolidation and dynamic pricing of food supply chains

This paper focuses on a perishable product supply chain with a vendor and multiple retailers. These retailers, densely spread in a distribution zone, are sensitive to price, delivery time and product quality. With the aim of optimizing the vendor’s expected long-run average profit during a shipment consolidation cycle, an analytical model is proposed for this problem. According to the upper bound expressions of the expected long-run average profit, the approximate optimal time policy and freshness-keeping cost are given based on a certain range of time parameter. Our theoretical findings are verified through a numerical case. Some useful managerial insights are obtained by analyzing the sensitivity of this model from six perspectives, which are market scenarios, types of perishable products, quality requirements of all retailers, cost parameters, line-haul time and vehicle capacity.