Ordering Policy for Agricultural Products by Direct-Purchase Supermarket:

A Semi-Theoretical Case Study on Perishable Items

Abstract

The promotion of China's agricultural-supermarket jointing model has brought new vitality to the development of the fresh agricultural products supply chain. Perishable items as one of the most familiar products displayed in the supermarkets, they are not only popular by the consumers, but also provide a large percentage of revenue to the store. However, due to the relatively short shelf-life of perishable items, out-of-stock and waste have become two major difficulties caused by inaccurate ordering policy. This study is aims to find an appropriate way in which to both satisfy consumer demand (by increasing the level of service) and reduce waste. By analyzing the relevant literature and sales records of a kind of perishable product which is lettuce of an agricultural products direct-purchase supermarket, a method called category management is applied and tested. Five scenarios which compared between non-category and category management are discussed. As a result, the category management could significantly reduce the waste and make the order quantity closer to the actual demand. On the other hand, category management gives less help on restricting the out-of-stocks occur. Because category management considers the overall category, not just a specific variety. This paper will help fresh agricultural products direct-purchase supermarket to improve the operation level, strengthening costs control, and further study of ordering policy provide theoretical references.