Purpose
There are particularly high fresh agricultural product (FAP) loss rates in actual supply chain operation and the development of FAPs e-commerce is hindered to some extent. The purpose of this paper is to achieve the coordination of three-layer FAP supply chain and maximize profit through the contracts among the supply chain members.
Design/methodology/approach
A three-layer FAP supply chain that consists of a fresh produce e-commerce enterprise, third-party logistics service provider (TPLSP) and community convenience store under e-commerce environment is considered. New game models are developed and optimal decisions in centralized and decentralized channel are characterized. Different contract coordination mechanisms are designed to improve the supply chain performance. Finally, computational studies are conducted.
Findings
The decentralized supply chain cannot be coordinated by a freshness-keeping cost-sharing contract, and it can be coordinated by a freshness-keeping cost-sharing and revenue-sharing contract. The optimal unit online selling price, unit logistics distribution price, fresh-keeping effort and unit self-collection service price can all be achieved.
Practical implications
The paper provides a practical guideline to managers in fresh produce industry in terms of how to cooperate with other supply chain members so as to maximize total profit and achieve Pareto improvement while also supply the freshest and safest produce to the target market under e-commerce environment.
Originality/value
Few studies have explored the coordination of three-layer FAP supply chain under e-commerce environment with TPLSP and community convenience store’s participation in decisions, especially considering that the market demand for FAPs is affected by freshness and unit online selling price. In this paper, all these scenarios are taken into account and corresponding mathematical models are developed. In particular, different contract coordination mechanisms are designed and examined simultaneously.
In practice, it is found that a product warranty can be provided by either the supplier or the manufacturer. As supply chains are increasingly integrated today, warranty costs are usually shared between the supplier and the manufacturer. In this paper, we model two different warranty policies based on which party provides the warranty: manufacturer warranty and supplier warranty. Considering the demand uncertainty and demand forecast, we analyze the information sharing strategy under these two warranty policies. Our results show that the manufacturer has an incentive to share the demand forecast information under both warranty policies when the cost efficiency in providing a warranty is high, which is different from the existing literature on the incentive for demand information sharing in the supply chain. Moreover, we find that it will hurt the party who determines the warranty period but benefit the other party.
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