Coordinating transportation and pricing policies for perishable products

Babaee, Sara; Araghi, Mojtaba; Rostami, Borzou

doi:10.1016/j.trb.2022.08.005

Cited by 5 publications

(1 citation statement)

References 42 publications

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“…In the harvesting or production stage, it needs to process and package goods to improve freshness index [1], [2]. Subsequently, during transportation and storage environmental factors (e.g., temperature, humidity, and ventilation) needs to be strictly controlled to prevent product spoilage and deterioration [3], [4], [5]. In this sense, freshness-keeping activities are dynamic.…”

Section: Introductionmentioning

confidence: 99%

Freshness-keeping Coordination in a Two-echelon Dynamic Supply Chain with Uncertainty: A Stackelberg Game Approach

Zhang,

Zhou,

Zhu

et al. 2024

IEEE Access

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Freshness index is one of crucial factors that affect demand of perishable products. Since freshness index decays over time with uncertainty, freshness-keeping investment is thus an important decision for supply chains except for selling price. We investigate cooperation problem of dynamic pricing and freshnesskeeping investment in a two-echelon perishable supply chain consisting of a distributor and one retailer. The retailer first announces a selling price. Additionally, he also shows a participation rate on freshness-keeping investment that specifies the fraction of the distributor's freshness-keeping costs that he will support. In response, the distributor determines his optimal wholesale price and freshness-keeping policy. We propose a stochastic model to describe the dynamics of freshness index and formulate the coordination problem as a Stackelberg differential game. Applying stochastic dynamic programming, two types of closed-form equilibrium are analytically obtained. Moreover, we conclude the system condition when the retailer chooses co-op freshness-keeping equilibrium. The results are compared with the corresponding policies in the vertically integrated channel, and we demonstrate that a combination of revenue and freshness-keeping sharing contract can coordinate the chain. The study presents managers with a quantitative instrument to design freshness-keeping coordination.INDEX TERMS Perishable Supply chain; dynamic pricing; freshness-keeping coordination;smart contract;Stackelberg differential game.

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