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Chinese Journal of Management Science ›› 2016, Vol. 24 ›› Issue (9): 147-155.doi: 10.16381/j.cnki.issn1003-207x.2016.09.018

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Coordination of Fresh Agricultural Supply Chain with Asymmetric Freshness Information

YANG Ya1,2, FAN Ti-jun1, ZHANG Lei1   

  1. 1. School of Business, East China University of Science and Technology, Shanghai 200237, China;
    2. School of Finance and Economics, Qinghai University, Xining 810016, China
  • Received:2015-05-29 Revised:2015-10-27 Online:2016-09-20 Published:2016-09-30

Abstract: Serious damages and spoils of fresh agricultural supply chain result from the high complicated management by fresh agricultural products' short life, perishable and seasonal characteristics, which lead to coordination difficulties between upstream and downstream. Specially, the information asymmetry existing widely, such as producer conceals the private freshness information to retailer, will further aggravate this circulative loss. Thus, it is a need for us to research on the coordination of fresh agricultural supply chain with asymmetric freshness information.
In this paper, a one-producer-one-retailer fresh agricultural supply chain in which the producer holds private freshness information is considered. The producer has to determine the wholesale price based on the production cost, the output and the retailer's possible order quantity. The retailer, on the other hand, has to determine order quantity and selling price, by taking into account the market demand and the freshness information came from producer. Models are developed to study the coordination mechanism of this supply chain with asymmetric freshness information. Moreover, a buyback contract is proposed to facilitate coordination between the two parties.
It is considered that agricultural products' demand is random, sensitive to the freshness, which degrades accelerated over time. Some single cycle newsboy models are developed, and each party's optimal decisions are derived in both decentralized and centralized systems based on Stackelberg game.
Two scenarios are analyzed in this model: freshness information symmetry and asymmetry. Firstly, the coordination model under symmetrical freshness information is constructed. Secondly, the centralized system and the decentralized system decision mechanism are analyzed under the scene that producer conceals the freshness information. Finally, the specific form of buyback contract is investigated to coordinate the supply chain.
An important implication from our study is that even if the producer conceals the freshness of the agricultural products, it will not necessarily impair the overall profit of the supply chain under the wholesale-price contract. In addition, we can ensure information sharing and supply chain coordination through appropriate buyback contract.
In the end, an illustrative case study dealing with acelery cabbage supply chain is discussed. Also, the impact of different freshness, conceal coefficient and profit distribution coefficient under asymmetric freshness information is illustrated.
Our contribution lies in how to find appropriate contract to coordinate this fresh agricultural supply chain when asymmetric information exists in the supply chain in which producer conceals the private freshness information to retailer.

Key words: freshness, asymmetric information, fresh agricultural product, coordination

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