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Effects of input capacity constraints on food quality and regulation mechanism design for food safety management

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  • Chen, You-hua
  • Huang, Sun-jun
  • Mishra, Ashok K.
  • Wang, X. Henry

Abstract

Input capacity constraints means a firm cannot make its output decision based on the first - order optimal condition of profit maximization because it does not have enough inputs. Input capacity constraints have a significant effect on production quality and firm competition, especially on food safety management. This paper tries to provide a new perspective for quality operation in supply chain management. It also designs a new mechanism for quality regulation. After distinguishing between quantity-sensitive input capacity constraints and quality-sensitive input capacity constraints, this paper demonstrates a theoretical analysis about the impact of input capacity constraints on food quality and quality regulation by game theory. The results show that both kinds of capacity input constraints lead to a lower level of output, quality and consumer surplus, but a higher level of prices. In this study, we design a quality regulation to stimulate the growth of high quality food products. More importantly, this paper proves that reward is more effective in food quality guarantee programs than punishment or fine based programs. The conclusions are helpful for addressing food safety problems for both the supervisors and firms.

Suggested Citation

  • Chen, You-hua & Huang, Sun-jun & Mishra, Ashok K. & Wang, X. Henry, 2018. "Effects of input capacity constraints on food quality and regulation mechanism design for food safety management," Ecological Modelling, Elsevier, vol. 385(C), pages 89-95.
    • Handle: RePEc:eee:ecomod:v:385:y:2018:i:c:p:89-95
    DOI: 10.1016/j.ecolmodel.2018.03.011
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    Cited by:

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    3. Hongfang Qiao & Xiaowei Lin & Xideng Zhou & Minglin Jiang, 2022. "Research on Joint Decision-Making of Timely Delivery, Product Quality and Marketing in Supply Chain Based on Differential Game," Sustainability, MDPI, vol. 14(17), pages 1-20, August.
    4. Chen, You-hua & Chen, Liu-man & Mishra, Ashok K., 2021. "Information, Capacity Constraints and Quality on Firms Competition," 2021 ASAE 10th International Conference (Virtual), January 11-13, Beijing, China 329427, Asian Society of Agricultural Economists (ASAE).
    5. Chen, You-hua & Chen, Mei-xia & Mishra, Ashok K., 2020. "Subsidies under uncertainty: Modeling of input- and output-oriented policies," Economic Modelling, Elsevier, vol. 85(C), pages 39-56.
    6. Nie, Pu-yan & Wang, Chan & Wen, Hong-xing, 2021. "Horizontal mergers under uniform resource constraints," Journal of Retailing and Consumer Services, Elsevier, vol. 63(C).
    7. Ningzhou Shen & Yinghua Song & Dan Liu & Dalia Streimikiene, 2021. "Food Quality Competition Among Companies and Government Food Safety Supervision Under Asymmetric Product Substitution," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 23(56), pages 221-221, February.
    8. Nie, Pu-yan & Wang, Chan & Yang, Yong-cong, 2019. "Vertical integration maintenance commitments," Journal of Retailing and Consumer Services, Elsevier, vol. 47(C), pages 11-16.
    9. You-hua Chen & Chan Wang & Pu-yan Nie, 2020. "Emission regulation of conventional energy-intensive industries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(4), pages 3723-3737, April.
    10. A. Amarender Reddy & Sandra Ricart & Timothy Cadman, 2020. "Driving factors of food safety standards in India: learning from street-food vendors’ behaviour and attitude," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(6), pages 1201-1217, December.
    11. Wang, Haiyan & Zhan, Sha-lei & Ng, Chi To & Cheng, T.C.E., 2020. "Coordinating quality, time, and carbon emissions in perishable food production: A new technology integrating GERT and the Bayesian approach," International Journal of Production Economics, Elsevier, vol. 225(C).

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    More about this item

    Keywords

    Input constraints; Quality control; Food safety; Quality regulation; Game theory;
    All these keywords.

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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