Vegetable Pricing and Restocking with Markov Models

Abstract

The freshness period of most vegetables in fresh produce superstores is relatively short, thus solving the vegetable replenishment and pricing decision problem is of practical significance. In order to make the best decision on vegetable commodity replenishment and pricing, this paper firstly fits a linear fit to the total sales volume and cost-plus pricing. Secondly, an optimisation model is established with maximum revenue as the objective function, cost-plus pricing and inbound unit price as the decision variables, and replenishment volume equal to sales volume as the constraint after considering the wastage rate. Finally, cost-plus pricing and in-stock unit price are predicted using cubic exponential smoothing.The utilization of Markov models allows for short-term forecasting based on a limited amount of recent data and possesses generality.