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Joint pricing strategy of fresh agricultural product cold chain logistics supply chain

Bing Han, Talib Zunirah Mohd

LogForum

2024

Vol. 20, no. 4

497--513

Background: In cold chain logistics, effective supply chain management is critical for fresh agricultural products. Fairness concerns and dual effort factors-suppliers’ sales efforts and retailers’ preservation efforts-significantly affect supply chain performance. Methods: A Stackelberg game model is developed to examine three scenarios: fairness neutrality, suppliers considering retailers’ fairness concerns, and suppliers disregarding retailers' fairness concerns. The study compares centralized and decentralized decision-making approaches in the cold chain logistics supply chain. Results: The simulation results reveal that centralized decision-making leads to higher overall system profits and increased supplier and retailer effort levels compared to decentralized decision-making. Although centralized decisions result in lower prices, increased efforts enhance consumer willingness to purchase, thereby boosting overall profits. Conclusions: When suppliers disregard retailers' fairness concerns, retailers may adjust prices or reduce efforts, negatively impacting both individual and system-wide profits. However, incorporating fairness concerns into joint decision-making strategies can improve overall supply chain performance.