Buyer–supplier collaborative cost sharing and the performance of fresh agricultural produce cold chains: a retailer fairness concern perspective

Abstract

PurposeThis study explores how collaborative cost sharing between the buyer and the supplier in cold chain equipment and marketing and advertising affects the performance of a fresh agricultural produce supply chain (FAP-SC).Design/methodology/approachWe use a contingency approach to modeling different scenarios and analyzing how fairness perception, interplaying with corporative–retailer cost sharing., influences the performance of fresh agricultural produce cold chains.FindingsThe findings of the research highlight the crucial role of the retailer's fairness concern. When the retailer's fairness concern is absent, cost sharing (in cold chain equipment and marketing and advertising) is found to help boost demand and enhance the profits of members of the supply chain; bilateral cost sharing is found to have a more significant impact than unilateral cost sharing. When the retailer's fairness concern is taken into account, however, cost sharing is found to reduce demand at a lower level of fairness coefficient but increases demand at a higher level of fairness coefficient; bilateral cost sharing boosts both demand and profit of the supply chain when the retailer is in a “high concern, high anger” state.Originality/valueThe findings of the research highlight the important role of the buyer's farness perception when supply chain partners adopt collaborative cost sharing programs. This study contributes significantly to research and practice in supply chain collaboration and agricultural cold chain performance.