Developing a novel pricing model for super fresh products considering uncertainty: a case study from the fruit retail sector

What the paper says

Purpose Some fruits and vegetables are classified as super fresh products (SFPs) due to their natural abundance of vitamins, minerals and other health-promoting nutrients. Since freshness is associated with vitality and well-being, it is also a key factor in food purchasing decisions. Although freshness is a key driver in buying fresh produce, retailers’ pricing strategies significantly influence purchasing behavior and reduce spoilage-related waste. This article models customer demand for SFPs based on price and freshness, while products that have lost their freshness are incorporated using a fuzzy demand model. The study argues that the designed pricing model for SFPs under uncertainty can enhance retailer profitability and reduce waste, presenting an approach to demonstrate relevant methods and efficiency for fresh and aging products. Design/methodology/approach A novel bi-objective, three-level model is developed, where end-customer demand depends on price and freshness, while a fuzzy demand model is applied to products that have lost freshness. The e-constraint method is applied to transform the bi-objective framework into a single-objective equivalent, and an enhanced McCormick method is employed to linearize the nonlinear integer programming model. A probabilistic technique addresses fuzzy uncertainties, enabling precise solutions for fresh product pricing. The approach involves directing nonfresh products to processing centers based on price and allocating them to end customers based on freshness and price within the supply chain. Market data are collected from retailers in Tehran, and sensitivity analysis is conducted to derive meaningful insights. Findings The findings demonstrate that the developed model successfully optimizes pricing strategies, achieving a balance between maximizing total profit and minimizing spoilage-related waste. Notably, maintaining waste levels between 10–15% yields system profitability, allowing retailers to achieve satisfactory profits while improving supply chain performance. Practical implications This research shows that implementing pricing strategies and waste-reduction techniques can enhance profitability for fresh produce retailers and businesses while contributing to environmental sustainability. Sensitivity analysis provides actionable insights for informed inventory management and pricing policies, improving retail business performance. Originality/value This study contributes significantly to the literature on fresh produce supply chains and pricing under fuzzy uncertainty and supplier disruptions. It highlights the benefits of pricing strategies, price- and freshness-dependent demand and waste minimization. The e-constraint method and nonlinear integer programming linearization enhance the work's originality. The findings offer valuable insights for academics and practitioners seeking to improve the sustainability and efficiency of fresh produce supply chains.