Research on Incentive and Coordination Strategy of Fresh Products' Supply Chain with Delivery Time under New Retail

Abstract

The new retail focuses on the high integration between online and offline channels. The main problems faced by the development of the new retail are the interest balance of all decision subjects, the pricing strategy, and the coordination of online and offline channels. This paper considers the effect of the new retail firms’ delivery time and establishes a two-part tariff contract to study the decision-making and coordination of the new retail fresh products supply chain. This paper constructs cooperative and non-cooperative models and employs the cooperative model as the benchmark case to realize the coordination. It is found that when the delivery time has little effect on the market demand, the offline store often should pay more fixed charges to the new retail firm. With the increased impact of delivery time on market demand, the fixed charges paid by the offline store become smaller. Under the coordination decision model, the offline store pays fixed charges to compensate for the new retail firm’s early delivery costs, but its interests still increase compared with the decentralized decision model. This study models the time-dependent demand for fresh products and proposes an incentive mechanism to coordinate the new retail fresh products’ supply chain; further, it demonstrates that the prices can be significantly decreased with the designed contract, and all the supply chain members can benefit from Pareto improvement.