Abstract: Monitoring and control of time-sensitive perishable products can be facilitated by the application of radio frequency identification (RFID) technology, which enables retailer take more flexible pricing and ordering polices based on real-time data of product quality and values collected by RFID. Highly perishable nature and time-sensitive demand are considered as typical characteristics of fresh agricultural product. Under different pricing strategies including fixed pricing, dynamic pricing and pricing with markdown timing, the single-period pricing and ordering decision making models are developed, from which the optimal decisions are obtained. All the optimal retail prices in the above three strategies would be lower with the smaller value of parameters of value deteriorating rate and inventory cost. However, these two parameters exert the opposite effects on the time point of pricing reduction. In terms of optimal retail price, total demand, and optimal profit for retailer, the comparison and analysis of three pricing strategies are then studied, which shows promising benefits of applying the flexible pricing strategy with RFID technology. Finally, a numerical example is provided to support the ndings.

Key words: fresh agricultural product, value deterioration, RFID technology, pricing decision