Abstract: In order to make up for customer loss resulting from the freshness reduction of product, retailers select the second-replenishment policy during a single sale period, in which fresh product and original product are on sale at the same time.However, the fresh product will cannibalize a part of demand for the original one.In this study, customers are divided into three types: fresh product only, price discount only and those without preference. The conception of demand cannibalization coefficient is introduced, how demand cannibalization affects retailers' ordering decision and profit under different customer classification is discussed, and the traditional single-order policy is used as a comparison.Conclusion proves that, since customers focus more attention on product’s quality such as freshness, the second-replenishment policy is able to effectively cut down retailers’ ordering quantity and improve their profit; it has not only economic benefits but also social effects, such as lowing down product loss, saving public resources and enriching customers’ consuming experiences.

Key words: fresh agricultural product, ordering policy, the second-replenishment policy, demand cannibalization, customer classification