A differential game model research on dynamic pricing and coordination of fresh agricultural products supply chain based on freshness

Abstract

For the problem of optimal dynamic pricing and coordination of fresh agricultural products supply chain, the differential equations related to freshness and market needs are constructed, and the optimal control theory is used to solve the optimal strategy under centralized and decentralized decision-making, i.e., optimal selling price and optimal preservation input. The equilibrium results under the two scenarios are also compared. The comparison finds that the decentralized scenario leads to low overall supply chain profits, based on which a two-part pricing contract is proposed to coordinate the supply chain operating companies. The results show that freshness effectiveness directly impacts pricing, and the centralized scenario does not necessarily lead to high prices for fresh produce due to the ‘double marginal effect’. the two pricing contracts can successfully coordinate the supply chain. The freshness effectiveness increases the supply chain coordination ability of fresh produce suppliers, while operational inefficiencies, on the contrary, decrease the coordination ability.