Fresh produce supply chain management decisions with circulation loss and options contracts

Abstract

Considering the circulation loss of the fresh produce, we investigate management decisions with options contracts in a two-stage supply chain in which a fresh produce supplier sells to a retailer with Stackelberg model. We derive the retailer's optimal option ordering policy and the supplier's optimal pricing policy. Taking the integrated supply chain as the base model, we get that options contracts cannot coordinate the fresh produce supply chain when the retailer only orders options. © Springer-Verlag Berlin Heidelberg 2013.