Differential Game Model of a Fresh Dual-Channel Supply Chain Under Different Return Modes

Abstract

The freshness of fresh products will directly affect consumers’ purchase behavior, and returns of fresh products will cause considerable waste. This paper investigates the differential game between a fresh e-tailer and a supplier with chain supermarkets in a dual-channel supply chain. We compare and analyze optimal equilibrium strategies under different return modes (refund mode and exchange purchase mode) of the fresh e-tailer. We also discuss the impact of fresh e-tailers (the advantage of fresh-keeping technology) sharing fresh-keeping technology with suppliers in the dual-channel fresh supply chain. Our results show the following: (1) The high sensitivity of consumers to freshness can improve the fresh-keeping efforts of the supply chain to a certain degree, thereby reducing product loss. (2) The refund amount and exchange purchase cost have a significant impact on the optimal equilibrium strategies under the two return modes. For suppliers, the exchange purchase model is the most advantageous. For fresh e-tailers, the choice is affected by the exchange cost and the relationship between the wholesale price and refund amount. (3) Under certain conditions, fresh e-tailers sharing fresh-keeping technology can improve the fresh-keeping efforts and profits of the supply chain.

Keywords

• Fresh e-tailer returns
• consumer loyalty
• dual-channel supply chain
• differential game