IoT Quality-Controlled Demand Pricing Model in Food Supply Chains

With the increasing availability and use of internet of things (IoT) sensors and platforms in food supply chains, there is an interest in studying their efficiency and impact on supply chain operations. To illustrate how classical operations management models could be affected by the introduction of IoT, we present an inventory model with deteriorating quality that can be monitored by IoT-enabled time–temperature indicator (TTI) sensors with application in the food supply chain. We develop a novel demand function that incorporates quality and its deterioration through three supply chain parties: producer, distributor and retailer. We use the model to analyse the impact of IoT on the retailer and distributor in a Stackelber game context.