Investment and coordination decisions in a supply chain of fresh agricultural products
- PDF / 1,951,049 Bytes
- 25 Pages / 439.37 x 666.142 pts Page_size
- 57 Downloads / 201 Views
Investment and coordination decisions in a supply chain of fresh agricultural products Ilkyeong Moon1,2 · Yoon Jea Jeong1 · Subrata Saha1
Received: 15 November 2017 / Revised: 19 April 2018 / Accepted: 1 June 2018 © Springer-Verlag GmbH Germany, part of Springer Nature 2018
Abstract This paper investigates investment decisions in a supply chain of fresh agricultural products. Based on investment decisions of supply chain members, three different scenarios are considered, and the corresponding results are compared by considering the impact of fairness indices. In the decentralized scenario, joint investment in maintaining product freshness is profitable for both the manufacturer and retailer; however, the manufacturer utility decreases progressively with an increase in the retailer fairness index. To coordinate and achieve a win–win outcome, and maintain fairness for each member, revenue sharing coupled with investment cost sharing is proposed. To enforce this contract, the manufacturer may need to charge negative wholesale prices, but as a result, the highest utility for the supply chain cannot be achieved. In an alternative approach, an incremental quantity discount contract may encourage the manufacturer to charge a wholesale price greater than the marginal cost such that both members of the supply chain achieve the highest utility possible. Extended numerical investigation provides insights on ways to manage an efficient joint-investment strategy for a sustainable fresh agricultural products supply chain.
* Subrata Saha [email protected] Ilkyeong Moon [email protected] Yoon Jea Jeong [email protected] 1
Department of Industrial Engineering, Seoul National University, Seoul 08826, Republic of Korea
2
Institute for Industrial Systems Innovation, Seoul 08826, Republic of Korea
13
I. Moon et al.
Keywords Supply chain management · Fairness concern · Coordination · Agricultural products
1 Introduction Because of evolving attitudes toward increased health-consciousness and better informed consumers, the freshness of agricultural products, such as fruits, vegetables, meat, fish, dairy, and so forth, has become a key driver for retaining customer loyalty and maintaining store traffic. Therefore, every member of an agriculturalproduct supply chain must take responsibility for maintaining the quality and freshness of the goods. Consumers consider color, odor, and texture as indicators of overall quality and freshness of food. To preserve these quality indicators, temperature-controlled transportation and storage systems, specialty material-handling equipment and packaging types, and specific shelf-space allocation strategies are required by both the manufacturer and retailer for harvested goods. For example, reusable plastic containers may be used to deliver lettuce and greens; however, paper pint or quart containers are typically preferred for delivering berries, cherries, and tomatoes. Furthermore, carrots and peaches should never be stocked on the same shelf. To accommodate preferences and freshnes
Data Loading...
