Research on Pricing and Coordination of Fresh Supply Chain with Altruistic Fairness Concern

Abstract

Considering a fresh supply chain consisting of one supplier and one retailer, this paper studies the pricing and coordination of fresh supply chain under altruistic fairness concern of the supplier. Based on the centralized decision and Stackelberg game theory, the decentralized decision model of supplier’s altruistic fairness concern is constructed, the pricing decision is analyzed, and the cost-sharing contract based on altruistic fairness concern is designed for coordination. The results show that the altruistic fairness concern of supplier can inspire retailer to improve the freshness-keeping effort level, which can help to the operation of retailer and supply chain, but damage the profit of himself. Freshness-keeping efficiency has an important impact on the marketing strategy of retailer: the retailer will implement the “high-quality with high price” if the freshness-keeping efficiency is low, otherwise implement the “high-quality with low price”. Cost-sharing contract based on the altruistic fairness concern can realize the perfect coordination of supply chain within a certain range.