Integration of pricing, sustainability and 3PL delivery time according to freshness date in a dual-channel fruit supply chain: A game theoretic approach

Abstract

The perishable nature of agricultural products poses a significant challenge in the management of agricultural supply chains, necessitating the timely delivery of these products. The increasing global population has led to a greater demand for food supplies, prompting the need for sustainable supply chains that take into account environmental concerns and social responsibility. By examining various strategies, such as cooperation, the field of agricultural supply chain management can experience growth. This study investigates a three-level agricultural supply chain model, comprising the farmer, third-party logistics (3PL), and two retailers (online and offline sellers). The 3PL plays a crucial role in this supply chain by ensuring the delivery of fresh produce to customers before the expiration date, as well as implementing environmentally friendly packaging practices. Additionally, the farmer contributes to charitable causes through cash donations. To explore the relationships among the members of the supply chain, two approaches, namely Stackelberg and Nash equilibrium games, are employed. Consequently, two distinct supply chain strategies are developed and compared. In the first scenario, the two retailers cooperate as a single entity, whereas in the second scenario, the retailers compete against each other with the Nash equilibrium utilized to analyze their interactions. In both scenarios, the farmer assumes the role of the Stackelberg game leader, while the retailers act as the first followers, and the 3PL functions as the second follower. The findings of the analysis indicate that cooperation between the two retailers results in higher profits for both parties and the entire supply chain, whereas the profit levels of the farmer and 3PL are comparatively lower in the first scenario. This model can be applied to other case studies that consider these two scenarios as well.

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