Perishable Goods Dual-channel Supply Chain Coordination Model

Perishable products have significant features such as long production lead period, short sales cycle, low residual value of unsold products, uncertain demand and so on. Electronic direct sales channel has many advantages over traditional sales channel, including its lower operating costs, larger scope of the potential market, longer service time and faster flow of information. All these advantages gradually cause concern of perishable goods businesses. The dual-channel supply chain model provides customers with two ways to buy, traditional retail channel and a internet direct sales channel. Businesses frequently take promotional strategies to gain market share, offering customers conditions to buy goods in different time. All these factors have led to the emergence and growth of a strategic customer group. Strategic customers choose the purchase channels as well as the good opportunity to buy based on maximum personal utility, the customer’s strategic behavior affects the optimal pricing strategies of the manufacturer and retailer, so companies have to re-examine the optimal sales model and supply chain strategy.Considering the strategic customers, this article is committed in coordination of perishable goods dual-channel supply chain:1) Firstly, establish the basic model of the three-stage dual-channel supply chain, taking advantage of the consumer utility function to describe the purchase behavior strategy customers, and discussing the distribution of customers based on the theory of rational expectations equilibrium assumptions, and get customer demand function. The customer demand shows different distribution depending on two pricing intervals;2) Next, analyse the optimal pricing strategies of the manufacturer and the retailer under centralized decision and decentralized decision, as well as the changes of the total profit of the supply chain; using simulation example, analyse the effectiveness of decentralized decision, as well as the impact unit product cost and customer unilaterally deviate from rational expectations equilibrium ratio on dual-channel supply chain profit. Research found that the prices fall in the first interval under decentralized decision can achieve the optimal supply chain, while when the prices fall in the second interval, decentralized decision fails;3) For the failure of decentralized decision when prices fall in the first interval, introduce return mechanism into the basic dual-channel supply chain, and establish the returns coordination model where sellers accept customer return without defects, to study the response of strategic customers on return policy, as well as the manufacturer and the retailer. Numerical simulation shows that the returns coordination model brings more profit than the basic mode under centralized decision.The analysis of strategic customers, perishable products dual-channel supply chain model, the optimal strategy of the supply chain members, as well as the introduction of the return mechanism to coordinate the supply chain, found that costs and the customer deviating from the equilibrium ratio affect the profits of the supply chain, in addition that returns coordination mechanism can coordinate decentralized decision, so that the profit achieves the optimum.