Organic level vs. sales effort in coordination of green food supply chain for deteriorating items

Abstract

Current research concentrates primarily on the effect of the organic level on the deterioration rate of products over a two-echelon food supply chain with two manufacturers and a retailer. One of the manufacturers produces organic products (OP), which is called the organic manufacturer (OM), and the other one produces non-organic products (NOP) with sales effort, which is called the non-organic manufacturer (NOM). Indeed, the NOM compensates for the organic advantage of OM by sales effort. The deterioration rate is assumed to be an ascending function of the organic level, and the products start to deteriorate at a specific rate that depends on the type of that product. In this study, the green supply chain based on the organic level is firstly examined in decentralized and centralized conditions, and then coordination between the retailer and the OM with the contract mechanisms is investigated. To demonstrate the performance of mathematical models, a real-world example and sensitivity analysis of crucial factors are presented. Thus, the chain profit increases, but one of the member’s profits will decrease.