Joint advertising and preservation service decisions in a supply chain of perishable products with retailer's fairness concerns

The prosperity of e-commerce in China complicate the relationships between supply chain members, such as members' fairness concerns. For perishable products, both advertising and preservation efforts can promote sales performance. This paper presents a dual-channel perishable product supply chain which consists of a supplier and a retailer. To understand the impact of the retailer's fairness concerns, we formulate a Stackelberg model to analyze the joint advertising and preservation service decisions of the supply chain members. Besides, we compare the supplier and the retailer's strategies and their revenues in different scenarios. The results show that there exist equilibrium solutions under certain conditions where the retailer is fair neutral or fair-minded. For a fair-minded retailer, expressing temperate fairness increases his revenue, but excessive pursuits of fairness are adverse to himself. Finally, we provide some managerial implications for suppliers and retailers to make supply chain strategies and design cooperation contracts. (C) 2019 The Authors. Published by Elsevier B.V. Peer-review under responsibility of the scientific committee of the 11th CIRP Conference on Industrial Product-Service Systems