Advance selling strategy of fresh products under two contracts
International Journal of Retail & Distribution Management
ISSN: 0959-0552
Article publication date: 13 February 2024
Abstract
Purpose
This paper analyzes the advance selling and pricing strategies of fresh products supply chain where the e-retailer provides wholesale contract or agency contract to the fresh products supplier.
Design/methodology/approach
This paper constructed a two-period sequential-move game of fresh products supply chain members.
Findings
This analysis showed that the supply chain members had different preferences for contracts under different market conditions. The advance selling of fresh products was not a decision of the seller, but also required the support of other supply chain members. And the advance selling strategy was not always beneficial to all supply chain parties. Under the two contracts, there were market conditions in which the profits of supply chain members were Pareto-improved through the implementation of advance selling.
Research limitations/implications
The model presented in this study focuses solely on the context of monopoly, overlooking the competition from alternative suppliers or retailers. Consequently, exploring the competitive landscape within the fresh products supply chain, particularly in relation to pre-sale pricing, emerges as a crucial avenue for further investigation. By employing empirical research methods, valuable insights are gleaned, thereby significantly augmenting the existing body of relevant theories.
Practical implications
The decision to pre-sell fresh products should be based on market conditions. Supply chain members can control production costs and fresh products circulation losses to maximize profits.
Originality/value
From the perspective of game theory, this study analyzed the optimal advance selling and pricing strategies of fresh products supply chain members under two kinds of contracts. These results can provide practical implications for fresh products suppliers and e-retailers.
Keywords
Acknowledgements
The authors would like to thank the editor and anonymous reviewers for their constructive comments, which have helped to improve this study significantly. This research is supported by Major Program of the National Social Science Foundation of China (Grant No. 21&ZD102), Hainan Provincial Natural Science Foundation of China (722QN287), University Scientific research project of Hainan Science and Technology Department (Hnsk2018-18); Research Start-up Fund Project of Hainan University (kyqd(sk)2022032).
Citation
Wu, S., Li, B., Chen, W. and Wang, M. (2024), "Advance selling strategy of fresh products under two contracts", International Journal of Retail & Distribution Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJRDM-09-2022-0334
Publisher
:Emerald Publishing Limited
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