Analysis on the impact of electronic secondary market on the perishable goods supply chain

The advance of business-to-business commerce has result in the establishment of many types of electronic marketplace. This paper focuses on a market exchange as the "secondary market" for the perishable goods-that is, for the resellers to disposal and acquisition of excess perishable goods inventory. Follow the method of Lee and Whang(2002) and Yan(2005), we develop a model of secondary market with second-period selling price endogeneously determined to clear the consumer market.. In this model, one manufacturer and n resellers compose a two-stage supply chain for perishable goods. The sale season is divided into two periods. At the beginning of first period, resellers order directly from the manufacturer, and at the beginning of second period, electronic secondary market opens, resellers can trade inventory among themselves in it. The first-period selling price is endogenously given and the second-period selling price is endogeneously determined by the consumer market clearance condition. We endogenously derive the optimal decisions for the resellers, along with the equilibrium market price of the secondary market and second-period selling price. And based on the analysis of resellers' decisions, we investigate the quantity effect and allocation effect of secondary market.