Optimal Operation Policies in a Cross-Regional Fresh Product Supply Chain with Regional Government Subsidy Heterogeneity to Blockchain-Driven Traceability

Abstract

The quality of fresh products through cross-regional sales has been uncertain to consumers. To improve the quality of fresh products, some fresh product supply chains have implemented blockchain technology to provide traceable information for their products, and some regional governments have subsidized their local firms to incentivize them to implement blockchain-driven traceability systems. However, with regional government subsidy heterogeneity, cross-regional fresh product supply chain firms lack theoretical guidance on their operation decisions. Based on the research gap, we investigate optimal operation policies in a fresh product supply chain consisting of a manufacturer and a retailer located in different regions. The local governments may subsidize the manufacturer or the retailer located in their own regions, which construct four subsidy strategies (SS, SN, NS, and NN) along the supply chain. We find that the optimal operation policies under four subsidy strategies can be affected by the sensitivity to traceability level, cost-sharing rate of the manufacturer, rate of products left after corrosion, and subsidy rate to the manufacturer. Moreover, the government subsidy to the retailer is always beneficial to the retailer and the supply chain but does not affect the manufacturer’s operation policies and profits. The government subsidy to the manufacturer is always beneficial to the manufacturer but not always beneficial to the retailer and the supply chain. Hence the desired subsidy strategy for the manufacturer is SS and SN, and the one for the retailer and the supply chain is either NS or SS with different conditions.

Keywords

• blockchain-driven traceability
• government subsidy heterogeneity
• fresh product
• cross-regional supply chain
• Stackelberg game