Abstract: Pricing and inventory control of deteriorating items have been the focus of cold chain control. In recent years, with the abundance of literature on pricing and inventory policy, more and more scholars start to research the joint pricing and replenishing policy for deteriorating inventory. However, most of them are with a view to retailers' policy rather than to a cold chain system, let alone the joint decision on inventory and pricing of an integrated cold chain. Moreover, deterioration in the previous researches is merely defined as the quantity loss of perishable products, which does not conform to all of the reality.
In real life, the deterioration of fresh agri-products not only means the decrease in the quantity/number, but also means the decrease in the quality, which is called "double loss". Therefore, "double loss" should be involved to explore the effects on joint pricing and replenishing policy in the integrated cold chain.
Firstly, the relations of quantity loss rate with freshness is built, where freshness is the function of preservation efforts and time. Meanwhile, the demand rate is considered as the function of both freshness and price. All the functions are justified.
Secondly, an integrated two-echelon cold chain inventory model composed of one distribution center (DC) and a retailer is proposed, where DC is both a distributor and a logistics service provider. It takes the maximum system profit per unit time as the basis of decision making to analyze the effects of freshness on the cold chain profit preferably. A genetic algorithm is employed to find the optimal preservation technology, the optimal replenishment strategy and the optimal pricing.
At last, as a simulation example, fresh-cut fruits and vegetables sold in a supermarket are analyzed to demonstrate the feasibility of the model. Through the sensitivity analysis, it is found that the decrease of the time sensitive coefficient or the increase of the freshness-keeping sensitive coefficient would result in the increase of system profit, and the time sensitive coefficient is more likely to change system profitability. However, not all fresh agri-products are adaptable to discount promotion.
The research of the "double loss" on the effect of joint pricing and replenishing policy in the integrated cold chain provides a new idea for the study of fresh agri-products. The optimized model and analysis result also provide references for cold chain operation.
The proposed model can be extended in multiple products and in coordination of the integrated cold chain system.

Key words: freshness, integrated cold chain, two-stage pricing, inventory strategy