Dynamic pricing and ordering decision for the perishable food of the supermarket using RFID technology

Purpose – The purpose of this paper is to study how supermarkets can maximize profits of selling perishable food through price adjustment based on real‐time product quality and values. Design/methodology/approach – The value of the perishable food can be traced based on an automatic product identification technology radio frequency identification (RFID). With the support of the RFID, an optimization model can be developed to enable product tracking. Findings – The analysis of the model shows promising benefits of applying a dynamic pricing policy and obtains the optimal ordering decision in respects of deterministic and stochastic demand function with RFID. Research limitations/implications – Although technological approaches for tracking products have attracted increasing attentions in both research and practice, little research have proved the profit using RFID by mathematics, the result of this paper can prove the benefit by using RFID. Practical implication – The result of this paper can tell the supermarket how to make the price and the ordering decision by using the RFID. Originality/value – This study proves the benefit of using the RFID by mathematical model based on the conceptual model before, and tell the method how to use RFID for pricing and making ordering decision.