Response to Out of Stock Produce and its Underlying Economic Considerations

The goal of this research is to investigate consumer response to out-of-stock product in the produce category. We do this by comparing results from a survey conducted in Greece and the United States to previous research on consumer response to out-of-stock situations for other perishable and non-perishable products. We further examined the underlying economic reasoning as well as the cultural and physical differences between the United States and Greece as explanations of different reactions. Out of Stock produce response proved different in produce than in other perishables and non-perishables. There is some evidence that produce does follow previous the suggested economic reasoning from the previous research, especially within transaction costs. Finally, the respondent’s country proved very significant in dictating response.Out-of-stock, grocery, perishables, opportunity cost, transaction costs, Agribusiness,

PERISHABLES DISTRIBUTION IN THE 1970'S: REFRIGERATION REQUIREMENTS FOR PERISHABLES

Why produce deteriorates and what you must do to prevent it.Marketing,

Supermarket Loss Estimates for Fresh Fruit, Vegetables, Meat, Poultry, and Seafood and Their Use in the ERS Loss-Adjusted Food Availability Data

A certain amount of food in supermarkets is deemed unusable (“food loss”) because of moisture loss, spoilage, and other causes. This study analyzed updated food loss estimates for fresh fruit, vegetables, meat, poultry, and seafood obtained through a competitive grant with the Perishables Group, Inc. This independent consulting firm compared supplier shipment data with point-of-sale data from six large national and regional supermarket retailers to identify loss in 2005 and 2006. The new estimates, when incorporated into the ERS Loss-Adjusted Food Availability data, had little impact on aggregate per capita food loss estimates in 2006 because the new estimates were, on average, close to the previous loss assumptions. The new estimates increased annual per capita estimates of fresh fruit available at the retail level by 0.7 pounds (0.6 percent), 4.2 pounds (2.7 percent) for fresh vegetables, and 4.8 pounds (2.7 percent) for fresh meat, poultry, and seafood. The commodity-specific food loss estimates are more accurate than in previous years.Conversion factor, food loss, fruit, meat, poultry, seafood, supermarket, vegetables, Agribusiness, Agricultural Finance, Financial Economics,

Separated by a common currency? Evidence from the Euro changeover

We study the price convergence of goods and services in the euro area in 2001-2002. To measure the degree of convergence, we compare the prices of around 220 items in 32 European cities. The width of the border is the price di¤erence attributed to the fact that the two cities are in different countries. We find that the 2001 European borders are negative, which suggests that the markets were very integrated before the euro changeover. Moreover, we do not identify an integration effect attributable to the introduction of the euro. We then explore the determinants of the European borders. We find that different languages, wealth and population differences tend to split the markets. Historical inflation, though, tends to lead to price convergence.Euro, economic integration

The impact of sales promotions on store performance: a structural vector autoregressive (SVAR) approach.

The paper analyses the impact of sales promotions on store performance, in the short and long term, from the retailer’s point of view. Relationships among promoted and regular sales in the hypermarkets of a large-scale retail chain of national importance, are investigated by means of a structural vector autoregressive model (SVAR). Statistically significant effects of sales promotions in the heavy household section on store sales are found in the short-run; these promotions produce additional sales and thus act as an attractive factor. Promotions in textile category, on the contrary, produce an immediate negative effect on net sales. In the long-run, negative statistically significant effects on regular sales are detected when continuative promotions are implemented within perishables’ category.promotional effectiveness, retail promotions, structural VAR, short and long-term effects.

The Value of RFID Technology Enabled Information to Manage Perishables

We address the value of RFID technology enabled information to manage perishables in the context of a supplier that sells a random lifetime product subject to stochastic demand and lost sales. The product's lifetime is largely determined by the time and temperature history in the supply chain. We compare two information cases to a Base case in which the product's time and temperature history is unknown and therefore its shelf life is uncertain. In the first information case, the time and temperature history is known and therefore the remaining shelf life is also known at the time of receipt. The second information case builds on the first case such that the supplier now has visibility up the supply chain to know the remaining shelf life of inventory available for replenishment. We formulate these three different cases as Markov decision processes, introduce well performing heuristics of more practical relevance, and evaluate the value of information through an extensive simulation using representative, real world supply chain parameters.simulation;value of information;RFID;perishable inventory

Re-investing in America's Infrastructure: Will it be Easy to be Green?

President-elect Obama has proposed major spending to revitalize America’s infrastructure. But how? First, where we have gone and where we are is the result of an historical co-evolution of public transportation infrastructure and private economic investment. Where we need to go is toward more efficient modes of transport that economize on fuel and energy use and reduce greenhouse gas (GHG) emissions. But how we get there is bounded to a significant degree by this past and present: what economists call “path-dependency.” Second, the historical evolution of public infrastructure has been important to the U.S. economy not simply because it supplemented private sector investments, but because the public investments raised private rates of return over time. National highways and bridges have made possible a shift in the carrying costs of inventory, one consequence of which has been to improve efficiencies in the delivery and availability of consumer goods. As more efficiencies in the use of scarce energy are sought economy-wide, business will be forced to find concentrations of activity along the nodes of supply chains that are more efficient. These adjustments can be facilitated by public infrastructure investments allowing for flexibility in intermodal transport activity, which can be a key aspect of the new administration’s national energy strategy. This brief discussion is divided into three parts: (1) the economics of infrastructure and its relationship to just-in-time inventory management; (2) an example drawn from the food industry case of fresh fruits and vegetables; (3) recommendations for a public investment strategy that maximizes the opportunities for efficiencies along the supply chain, thus conserving energy.Environmental Economics and Policy, Public Economics,

Noisy Information, Distance and Law of One Price Dynamics Across US Cities

Using micro price data across US cities, we provide evidence that both the volatility and persistence of deviations from the law of one price (LOP) are positively correlated with the distance between cities. A standard, two-city, equilibrium model with time-varying technology under homogeneous information can predict the relationship between the volatility and distance but not between the persistence and distance. To account for the latter fact, we augment the standard model with noisy signals about the state of nominal aggregate demand that are asymmetric across cities. We further establish that the interaction of imperfect information and sticky prices improves the fit of the model.

Causes and damage to fruits and vegetables during shipment

Cover title.Includes bibliographical references

Pricing Perishables

 A key feature of food products is their perishability. Within the short marketing window that characterizes most food and ag products, demand is typically highly stochastic and difficult to predict. This combination of features poses substantial challenges to retailers when pricing products and has implications for performance that ripples through vertical food chains. For many food products, processing to forms that can be preserved and held in inventory has traditionally been used as a means of coping with these conditions, despite its high costs and ancillary risks introduced such as change in product attributes and deterioration. This paper presents an alternative ERM strategy that focuses on dynamic pricing to control the rate of sale for perishable products. The paper considers a retailer that has market power to price and supplies perishable products to a market with substitute products and demand originating from heterogeneous consumers. Perishability implies a finite horizon for the marketing of the products over which demand across market segments of consumers is both dynamic and stochastic. Faced with uncertainty, we suppose the firm has limited information about the stochastic properties of demand and must choose a pricing strategy that projects over the market horizon. This price trajectory represents a key control mechanism to cope with uncertainty of both the perishability of the product and of demand