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

  • Yunlong Yu
  • Tiaojun XiaoEmail author
  • Zhangwei Feng
Original Research
  • 69 Downloads

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 

Notes

Acknowledgement

This paper was partly supported by: (i) China National Funds for Distinguished Young Scientists under Grant 71425001; and (ii) the National Natural Science Foundation of China under Grants 71871112 and 71371093.

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.School of Management and EngineeringNanjing UniversityNanjingChina
  2. 2.Business SchoolChangzhou UniversityChangzhouChina

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