Price and cold-chain service decisions versus integration in a fresh agri-product supply chain with competing retailers

Yunlong Yu (), Tiaojun Xiao () and Zhangwei Feng ()
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Yunlong Yu: Nanjing University
Tiaojun Xiao: Nanjing University
Zhangwei Feng: Nanjing University

Annals of Operations Research, 2020, vol. 287, issue 1, No 19, 465-493

Abstract: Abstract This paper studies the price and cold-chain service decisions of a fresh agri-product supply chain with competing retailers and explores the impacts of (horizontal/vertical) integration on the decisions and profits. When the cold-chain service price is exogenous, we find that vertical integration is more effective to decrease quantity/quality loss of agri-products; the third-party logistics provider is better off with vertical integration while horizontal integration hurts both the third-party logistics provider and the supplier. We identify the conditions under which a retailer benefits from vertical or horizontal integration. Whether horizontal integration can improve the retailer’s profit depends on product substitutability. The profit of a retailer can be enhanced by vertical integration between the other retailer and the supplier if product substitutability is low. The endogenization of the cold-chain service price does not change the main results qualitatively.

Keywords: Supply chain management; Third-party logistics; Cold chain service; Integration; Game theory (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (13)

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DOI: 10.1007/s10479-019-03368-y

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