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Study on the fresh degree incentive mechanism of fresh agricultural product supply chain based on consumer utility

CAO Yu1 LI Ye-mei1 WAN Guangyu2

(1.Business School, Central South University, Changsha, China 410083)
(2.School of Economics & Trade, Hunan University, Changsha, China 410083)

【Abstract】With continuous improvement of consumers’ living standards, consumers’ demand for food safety has converted into the demand of both safety and high quality. Food fresh degree is widely arising consumers’ concern. Changes in consumers’ demand for fresh food makes a great many retailers and suppliers increasingly concerned about perishable goods and strengthen the management of fresh food supply chain. However, as a result of the attributes of perishable food itself and the lagging development of cold chain logistics technology, its management result is far from expectation. According to the data of CECRC, the loss rate of fruits and vegetables reaches 30% per year, which causes around CNY 1 billion per year. Based on the statement above, the improvement of whole fresh degree on fresh supply chain is chosen as research topic. The fresh degree advancement is of great significance to reduce waste, as well as improve the overall profitability of the supply chain and social welfare. The supply chain system composed of two suppliers and one retailer is mainly studied based on the consumer utility theory. The fresh degree incentive model of fresh agricultural products under single cycle is constructed. In the model, supplier is the leader. With the Stackelberg game method, manufactures’ optimal pricing and optimal freshness effort selection strategy under the equilibrium state are obtained. Results show that supplier, retailer profit and consumer price sensitivity coefficient are in reverse change. In the price competition market, the degree of preservation effort, profit and price substitution factor of the supplier show a reverse change. In the fresh degree competition market, the degree of preservation effort and profit, with the substitution rate of fresh degree change are in the same direction. Based on research conclusions, manufacturers and the government should cooperate to guide the consumer’s consumption concept jointly, reduce the moral hazard caused by information asymmetry as far as possible and avoid the phenomenon of Gresham.

【Keywords】 consumer utility; fresh supply chain; degree of freshness preservation effort; pricing strategy;

【DOI】

【Funds】 National Natural Science Foundation of China (71573281) Innovation-Driven Project of Central South University (2016CX040) Major Project of Hunan Provincial Social Science Achievement Review Committee (XSP17ZDA011)

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This Article

ISSN:1003-207X

CN: 11-2835/G3

Vol 26, No. 02, Pages 160-174

February 2018

Downloads:2

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Article Outline

Abstract

  • 1 Introduction
  • 2 Model symbols and assumptions
  • 3 Fresh agricultural product supply chain decision model
  • 4 Sensitivity analysis
  • 5 Comparative analysis
  • 6 Conclusion
  • References