Research on Pricing and Fresh-keeping Strategy in the Fresh Agricultural Product Supply Chain with Dual Channels

The pricing and fresh-keeping strategy is studied in the fresh agricultural product supply chain(FAPSC) composed of one supplier and one retailer, in which the retailer sells the fresh agricultural products through both online and offline channels. Mathematical models are developed to determine the optimal fresh-keeping effort, retail and wholesale prices. The impacts of different channel cost structures on FAPSC are discussed. The results show that no matter the supplier or the retailer bears the fresh-keeping cost, the optimal sales quantity, fresh-keeping effort and total profit in the decentralized FAPSC are all less than that in the centralized FAPSC. Also, the optimal sales quantity, fresh-keeping effort and total profit in the decentralized FAPSC with the supplier bearing the fresh-keeping cost are the least compared to the centralized FAPSC and decentralized FAPSC with the retailer bearing the fresh-keeping cost. Introduction With the repaid development of network technology, consumers are getting more and more used to purchase fresh agricultural products through the network. Online channel has become a significant channel for product sales. Compared with the traditional retail channels, online sale channel has a lot of advantages, such as offering more competitive retail price and purchasing more conveniently(Stringer K,2014). Therefore, a lot of traditional retail enterprises, such as WAL-MART and RT-MART, introduced online channel to gain competitive advantage. As a new profit growth spot in network economy, fresh agricultural products began to be sold through the online channel besides the offline channel. Different from the general products, the freshness is an important factor that affects customers' purchase intention of fresh agricultural product. What's the optimal fresh-keeping effort of the FAPSC member and who bearing the fresh-keeping effort cost is more beneficial to enhance the freshness of fresh agricultural product. The literature related to the supply chain with dual channels mainly aims to solve the problems of channel pricing decision and channel coordination. Tsay (2004)found that increasing the electronic channels can improve the profits of both sides of the supply chain. Cai(2010) studied the impact of dual channel structure on producers, retailers and the whole supply chain system.Chiang (2013) studied the pricing of dual channel based on the consumer utility theory. Yue and Liu (2015) analyzed the impact of the direct selling channel's joining on the supply chain performance; Dumrongsiri (2017) studied the pricing problem of dual channel supply chain and the retailer's order decision. Tong Yang (2017) considers the optimal strategy of dual channel supply chain with consumer returns. The literature involved FAPSC is divided into two categories.One is the case where the demand rate is fixed constant.The other is that the demand rate is time-varying which is influenced by price and freshness.Levin(2003) studied the effect of freshness of fresh products on the construction of supply chain.Chen Jun(2016)established the inflexion function of the demand rate affected by the price and freshness.Wu Xiaozhi (2015) considered the demand model which is affected by price and channel service level. On the study of freshness, most literature consider freshness impacted by 166 Copyright © 2018, the Authors. Published by Atlantis Press. This is an open access article under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/). 2018 5th International Conference on Management Science and Management Innovation (MSMI 2018) Advances in Economics, Business and Management Research (AEBMR), volume 54