Pricing Decisions with Effect of Advertisement and Greening Efforts for a Greengocer

Organic farming has become popular and in demand among health-conscious people nowadays. Organic vegetables are grown using organic seeds and natural fertilizers. People have turned to using organic food products not only due to them being fresh and full of nutrition but also being eco-friendly. The present study is carried out to outline pricing decisions for a greengrocer of organic products. The grocer grows and sells fresh vegetables with the input of greening efforts. The grocer uses advertisements to promote sales. Product demand is influenced by the selling price of the product, greening efforts, and advertising efforts. The problem is formulated into a mathematical model to obtain optimum policies to maximize the total profit of the greengrocer. The model is validated by an illustration. The impact of small-scale changes in inventory parameters on decision variables is studied to analyze managerial aspects. The results show that the sales volume increases due to advertisements and greening efforts up to a certain level. Once the peak sales level is achieved, such investments are of no use, and they cause a drop in overall profit. The selling price of the product can be reduced in the absence of advertisement efforts, but, eventually, it causes a fall in the sales volume.