Fresh food supply chain coordination with competition and differentiated freshness preservation methods

Abstract

For a secondary supply chain consisting of a supplier and two competing retailers, freshness spoilage rate, competitive behavior and market capacity constraint are introduced into the traditional demand-substitution model. Under different preservation methods such as chilling and freezing, the Gounod double oligopoly game and the conspiracy game competition models between retailers are constructed with the benchmark of the centralized decision-making. The optimal sales price and ordering decision are secured, and the influence of market volume, freshness deterioration rate and demand substitution rate on the optimal decision is analyzed under different competition models. Meanwhile, an optimal revenue coordination contract is constructed to maximize the benefits of each subject in the fresh supply chain. The results show that the optimal sales price and optimal order quantity are positively correlated with the respective market volume and demand substitution rate, but negatively correlated with the deterioration rate of goods. The optimal coordination degree of the proposed revenue-sharing contract is 100%, which indicates that this contract can effectively coordinate the interests of all parties in the fresh supply chain and achieve the overall optimal supply chain.