Supply Chain Network Equilibrium Model for Perishable Products Based on Retailers’ Utility

Authors

Jun Ma, Department of Mechanical and Manufacturing Engineering, University of Calgary, Calgary, Alberta, Canada T2N 1N4;School of management, Shenyang University of Technology, Shenyang, Liaoning, China, 110870
Yiliu Tu, Department of Mechanical and Manufacturing Engineering, University of Calgary, Calgary, Alberta, Canada T2N 1N4

Abstract

We study a supply chain network equilibrium model for perishable products under the theory of discrete choice models, which comprises multiple perishable product manufacturers, distributors and retailers. Our goal is to present equilibrium outputs for different firms in this supply chain network model for perishable products based on retailers’ utility maximization. The network model is built upon transportation time function and deterioration rate to express the characteristics of perishable products, with the inclusion of the discarding costs associated with temperature control in transportation. Discrete choice model was used to elaborate retailers’ choice according to their utility maximization. Furthermore, the variational inequality formulation is used to express the equilibrium solution of supply chain network for perishable products, which determines their profit shares in competition. A numerical example is present to support this model is reliable and reasonable.

Recommended Citation

Ma, Jun and Tu, Yiliu, "Supply Chain Network Equilibrium Model for Perishable Products Based on Retailers’ Utility" (2016). WHICEB 2016 Proceedings. 19.
https://aisel.aisnet.org/whiceb2016/19