Monetary aspects of acquiring technology for price discrimination of a perishable storable product

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The remaining shelf-life of perishable storable products can become an additional source of volatility among consumers and a matter for price discrimination. Two models are presented. Both models assume the retailer has the information about consumers' sensitivity to the remaining shelf-life (eg, their purchasing history). Only the first assumes the retailer has also the technology for price discrimination. An optimal solution for each model is analytically obtained and a numerical example that illustrates the significance is introduced. Numerical illustration indicates that a policy of identical prices for all based on accurate information about consumer sensitivity to remaining shelf-life results in a profit that is just slightly smaller per unit of time compared with the price discrimination policy. Opposing, the numerical illustration also indicates significant difference between the models with respect to their impact on consumers. Following these results, the regulator may consider suggesting the retailer monetary incentives in order to utilize price discrimination.

Original languageEnglish
Pages (from-to)564-575
Number of pages12
JournalJournal of the Operational Research Society
Issue number4
StatePublished - 1 Apr 2016

Bibliographical note

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© 2016 Operational Research Society Ltd. All rights reserved.


  • perishable inventory
  • price discrimination
  • price-dependent demand
  • sensitivity to remaining shelf-life
  • time-dependent demand


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