A study on inventory control strategies of fresh food supply chain considering advertising delay effect

Abstract

PurposeThe existence of the advertising delay effect and its impact on supply chain operations have been demonstrated in the current study. Therefore, this study develops a timely inventory control strategy for the fresh produce supply chain to address the advertising delay effect in the fresh produce supply chain.Design/methodology/approachThis study proposes a game model based on the Nerlove-Arrow time delay differential equation and Pontryagin's maximum principle. Through comparative analyses of the optimal equilibrium strategies, the authors compare the optimal equilibrium strategies, product goodwill and optimal inventory trajectories for suppliers and retailers under secondary replenishment decisions and decentralized decisions.FindingsThe authors find that (1) Only when the sales cycle meets certain conditions can the overall profit of the supply chain under the secondary replenishment decision be greater than that under the decentralized decision. As the price markup coefficient increases, the total profit of the supply chain first increases and then decreases. (2) With the increase in the delay time, the replenishment quantity during the initial period gradually decreases. After the delay time elapses, the inventory depletion rate under secondary replenishment decisions is faster than that under decentralized decision-making. (3) Although there is a continuously increasing maximum value of product goodwill with the increase in delay time, it becomes difficult to achieve this value for longer delays.Practical implicationsThe authors’ findings provide a theoretical basis for supply chain members of fresh agricultural products to select replenishment and inventory control strategies when adopting different levels of delay in advertising marketing.Originality/valueFirstly, this paper explains the impact of advertising delay effect on fresh produce supply chain from a dynamic perspective, and secondly, it provides guidance on advertising formulation and inventory replenishment for fresh produce retailers under the influence of advertising delay effect.