The Coordination of Multi-Stage Discounts in a Dual Channel Fresh Agricultural Pro-duce Supply Chain: Minimizing the Loss of Quantity and Quality

Abstract

This paper explores the coordination of the agricultural cooperative to supermarket or E-commerce sup-ply chain, under the condition of quantity loss with a mixed decay function of exponential and logistical distribution. The nature of this process is analyzed, and the corresponding demand and supply functions with single- and multi-stage discount strategies are constructed respectively to create a working model. The optimal discount ratios for supermarkets and agricultural cooperatives in decentralized and central-ized decision-making modes coupled with single- and multi-stage discounts are calculated respectively. Finally, a universal optimal strategy is designed, which can be applied to various quantity decay scenarios and makes the discount strategy more generalized. The results show that discounts can coordinate supply chains more effectively; not only is fresh agricultural produce sold before it starts to rot, but the benefit conflicts arising from both supermarkets vs. cooperatives and traditional vs. E-commerce channels are equilibrated. Further, multi-stage discounts are more effective than single-stage ones, but optimal discount ratios rely on the initial quantity of fresh agricultural produce in the supply chain; its market share in the traditional distribution channel; the potential market size; retail price; the price sensitivity coefficient of the channel; the cross-elasticity coefficient of prices between different channels; and the properties of the quantity loss.