Price sensitivity to expiration date

Hi everybody,

My name is Martin and I am a student at Wageningen University in the Netherlands. Curently I am working on my master thesis on optimization of perishable products production. To describe it shortly, I need to incorporate perishability (decline in quality) of (food) products to models that determine optimal production plans.
I came to a point where my model is forumlated but I need some data for my examples (of course I made up some data just to test the model, but I cannot put that into my thesis).
The most suitable way of describing this decrease of quality, for the model, is to translate it into decreasing price for the product. In other words I am interested how much a customer/retailer is willing to pay for the same product when it's e.g. 3, 5 or 10 days before expiration date.
The group of products can be anything from 'fresh' but processed groups (e.g. packed vegetables, processed meat or organic juices etc.). It has to be a group of similar products, which are processed on one kind of machine (like packaging machine), but not necessarily of the same durability.

Does anyone know where can I find this kind of data? Whom to ask for it?

Thanks in advance,
Martin

Sorry I don't but one thing to consider is the treatment of the chilled food; even within a product category can increase life but may change some properties (or may make a perceived change) which may make that food undesirable and, in fact, chilled foods which have shelf lifes which are too long might be viewed with suspicion. What I'm thinking of is for example, juice could be freshly squeezed or heavily heat treated; the former would have a much shorter life yet also be more expensive. Ready meals could be chilled or post pack pasteurised. The latter will have much longer life but will tend to be the cheaper end of the market.

All I'm cautioning is to make sure you truly compare like with like!

Dear Martin,

have you tried to go to any supermarket and ask for info? I got some help from supermarket a couple of years ago, knocked on the door, turned on my best smile and people found time to talk to me. You can also send e-mails and maybe someone will response?? Or call.. Normally students are many places.

Sorry I don't but one thing to consider is the treatment of the chilled food; even within a product category can increase life but may change some properties (or may make a perceived change) which may make that food undesirable and, in fact, chilled foods which have shelf lifes which are too long might be viewed with suspicion. What I'm thinking of is for example, juice could be freshly squeezed or heavily heat treated; the former would have a much shorter life yet also be more expensive. Ready meals could be chilled or post pack pasteurised. The latter will have much longer life but will tend to be the cheaper end of the market.

All I'm cautioning is to make sure you truly compare like with like!

Hi GMO,
thanks for reply. I might have mentioned specification of my problem better. it is a multi-item, single machine capacitated lot sizing problem in which I need to incorporate perishability, somehow,
and as I mentioned I need a group of similar products, which can be produced (processed or packed) on one machine e.g. 5 different flavours of a juice or a yoghurt.
secondly I do not need to compare those prices or sensitivities between products or groups of products. I just need them to have some reliable data from the real world for my examples - to test my model on empirical data.

Dear Martin,

have you tried to go to any supermarket and ask for info? I got some help from supermarket a couple of years ago, knocked on the door, turned on my best smile and people found time to talk to me. You can also send e-mails and maybe someone will response?? Or call.. Normally students are many places.

Hmm, I had a plan to go to a supermarket to look for a good product but I haven't thought of asking them about the prices. Thanks for the advice.

Dear Leojohnnson,

I might have mentioned specification of my problem better. it is a multi-item, single machine capacitated lot sizing problem in which I need to incorporate perishability, somehow, and as I mentioned I need a group of similar products, which can be produced (processed or packed) on one machine e.g. 5 different flavours of a juice or a yoghurt.
secondly I do not need to compare those prices or sensitivities between products or groups of products. I just need them to have some reliable data from the real world for my examples - to test my model on empirical data

i understood yr first post OK but the text above defeated me absolutely. Sorry

Rgds / Charles.C

In other words I am interested how much a customer/retailer is willing to pay for the same product when it's e.g. 3, 5 or 10 days before expiration date.

Thanks in advance,
Martin

Hi Martin,

There is no simple answer to this question. Retailers tend to have a minimum into store requirement to reduce their wastage. In rare circumstances involving large amounts of product I am sure a "one off deal" is possible but this is sensitive information and it is unlikely that anyone would volunteer it to you.

For non-own label there is more room to manouvre where products could be sold at markets or other parties who buy short shelf life products. Again I would be surprised if anyone would divulge this sort of sensitive information.

An interesting thesis, however, I would suggest most organisations manage wastage by customer relationships (Asking the customer to take over production), sales forecasts, stock control, production planning, producing to order and production control (e.g. +/- 100 packs).

Regards,

Tony

Dear Martin,

I agree with Tony. Our company is into Juice & Dairy Manufacturing. Initially before 2009, we were producing and keeping the goods for sale without relating to any sales plan/requirement. We always keep buffer of the items. But from 2009, our production & procurement plan is based on Sales Forecast. We never produce/buy anything, which is not a sales requirement/demand.

And FYI, when there is any offer with any product in supermarket - 2+1 free - I always check for the production/ expiry dates - and found the expiry of the product is hardly one month or 3 month maximum left (for juice/coconut water/pickle/ noodles / any onshelf product).
Rgds,
anish