Document Type

Thesis

Date of Degree Completion

Spring 2016

Degree Name

Bachelor of Science

Department

Economics

Committee Chair

Charles Wassell

Second Committee Member

Robert Carbaugh

Third Committee Member

Dominic Klyve

Abstract

This research is focused on finding a pricing model for Washington State cherries. Each year a significant number of cherries are not sold, or are sold at a price close to or under cost, due to issues with program cherry purchases and pricing models. This research looks at two specific markets: the program fruit business and the wholesale markets. The program fruit business is comprised of companies such as Kroger, Wal-Mart, Costco, and others that “pre-purchase” their fruit at a specific price for delivery at a later date, much like a futures market for other commodities. The wholesale market, also referred to as the spot market, is made up of companies that purchase fruit for immediate delivery after it has already been packaged. In recent years there has been a gap between the pricing of wholesale and program markets. Specifically, the fruit that is sold to program business is at a price high enough that wholesale customers are able to sell fruit to traditional program customers at a lower price than the initial firm selling the fruit. The issue is fairly clear: firms are undercutting their own business by not being able to determine the correct pricing for program and wholesale business.

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