The revenue and preservation-technology investment sharing contract in the fresh-product supply chain:A game-theoretic approach

Abstract

This research considers a fresh-product supply chain consisting of a single-buyer, a single-supplier for deteriorating products where the market demand is dependent on the retail price, fresh rate, and remaining rate. Firstly, in a competitive model, the primary decision variables (i.e., the supplier's wholesale price and preservation-technology investment and also buyer's order quantity and retail price) are determined. Afterward, a centralized model is developed to optimize the whole system so that all the players of supply chain reach equilibrium. Then, a combined incentive mechanism based on revenue and preservation-technology investment sharingis designed to motivate the members to participate in the centralized model. Finally, the proposed models are accreditedwith the data set of a real-life case study. The results indicate that the designed contract is capable of coordinating the fresh-product supply chain under a wide variety of sharing rate. Moreover, the transactions in the centralized mode will have less Lost-of-Profit than the decentralized ones while it also has a higher whole channel's profit.