AN OPTIMAL FRESHNESS-KEEPING EFFORT MODEL FOR FRESH PRODUCE WITH CONSTRAINTS OF SPECIAL FUNDS

Abstract

The quality deterioration in the post-production process of fresh products is very serious, and the life-cycle freshness-keeping technology investment is an effective way to reduce the deterioration. Because the investment cost is high in practice, enterprises need to allocate special funds for each stage to maximize their marginal revenue. In this paper, we use freshness to characterize the quality level of fresh products and investigate a maximize marginal revenue problem where a firm assigns special funds for the freshness-keeping effort with each post-production process. An optimal freshness-keeping model with the constraints of special funds is discussed. The investigation shows that both the optimal freshness-keeping effort and the closed-form optimal solutions of enterprises exist uniquely. A reasonable freshness-keeping investment in different post-production processes can improve the performance of enterprises with limited fund constraints. We then simulate the effect rules of funds constraint on these solutions based on numerical analysis and give some management insights