Coordinating a fresh-product supply chain with demand information updating: Hema Fresh O2O platform

Abstract

Motivated by Hema Fresh's new-retail case, we study the coordination of a two-echelon fresh-product supply chain consisting of a single supplier and a single retailer. Due to a long production lead time, the supplier has to make production decision in advance based on early demand information. The market demand can be updated during the supplier's production lead time. Hence, the retailer would make order decision according to the latest demand information. Incorporating risk-sharing mechanism of overproduction and overstock, we propose a novel bi-directional risk-sharing contract to coordinate such a supply chain with demand information updating. We construct a two-stage optimization model in which the supplier first decides production quantity, and then the retailer decides final order quantity not exceeding the supplier’s initial production. In both the centralized and decentralized systems, we analytically derive the unique equilibrium of production and order decisions in a Stackelberg supplier-led game. We prove that the proposed contract can realize supply chain perfect coordination and explore how the proposed contract affects the members'decisions. The theoretical results show that, by turning the risk-sharing proportions, the supply chain profit can be arbitrarily split between the members, which is a desired property for supply chain coordination. Compared with the single risk-sharing contract, the proposed contract results in a greater supply chain profit and achieves Pareto improvement for both members. Furthermore, we also explore how the risk preference and negotiating power affect the contract selection and the additional profit allocation of the supply chain. Numerical examples are presented to verify our theoretical results.

Pricing strategy research in the dual-channel pharmaceutical supply chain considering service

“…When , in the case of a certain manufacturer’s service level ), is at ( 4 , 6 ), and through two pricing strategies, Pareto improvement can be achieved through further supply chain coordination. In this case, the compensation cost is relatively high, and a Pareto improvement is achieved.…”

“…Cheng et al ( 3 ) point out that Pareto improvement can be achieved by raising prices. Under the background of the platform supply chain, Yang et al ( 4 ) analyzed the price of retail and online channels, order quantity, and delivery time of online channels by considering five decision variables. Barenji et al ( 5 ) considered the effect of simultaneous disruptions of demand and cost on dual-channel supply chain production, pricing, and profit.…”

Contract Coordination of Fresh Agri-Product Supply Chain under O2O Model

“…This type of coordination further illustrates the extent to which cooperative ratios can more effectively align the interests of supply chain members and reduce channel competition. In addition, most scholars use the contractual coordination method to study the supply chain in the research on O2O model [4,[37][38][39][40], but there are relatively few studies that focus on freshness and freshnesskeeping in the coordination of the supply chain. Therefore, with the O2O sales model in mind, we take freshness and freshness-keeping as the main factors to study the O2O contractual coordination in the fresh produce supply chain, thus illustrating the role of freshness in what range can better meet consumer demand.…”

“…In addition, Yang and Tang [4] study the optimal price decisions of suppliers and retailers under different sales models, and find that the O2O model can lead to higher supply chain profits under coordination. Based on the O2O platform, a new two-stage risk-sharing contract can effectively coordinate the supply chain and lead to higher supply chain profits [40].…”

Research on the construction of a visualization platform for customer demand analysis based on big data technology

“…Data information visualization technology through the product abstract data information to provide interactive visual representation, enhance people's ability to recognize complex data information, to meet people's product needs [7][8]. In today's market, customers demand products with diversity and personalized customization, and market diversification requires enterprises to try to meet the changing needs of the market.…”