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The evolution of fresh produce supply chains: From spot markets to contracts

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The concentration in large retail firms is having a major impact on supply chain organization, and their buying power and supply contracts have led to a profound change in the fresh fruit and vegetable industry. Closer vertical co-ordination has occurred as the use of spot markets has declined. This paper proposes a model of a three-level supply chain consisting of producers, a wholesaler, and a retailer under the influence of two kinds of uncertainties with respect to product quality and retail demand. We use this model to consider the effects of vertical co-ordinationon output, prices, and the welfare of the various participants.

Keywords: Supply chain; fresh produce; vertical co-ordination

Document Type: Research Article


Affiliations: Graduate School of Business Administration, Kobe University, Japan

Publication date: September 1, 2007

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