Dynamic pricing and preservation strategy for a two-echelon perishable supply chain model with price and time sensitive demand

In a manufacturer-retailer supply chain, the manufacturer oversees the production and supply of the goods, while the retailer deals with customers. This study addresses the challenges faced by both the channel members while dealing with a multi-period business scenario with price and time dependent demand. The article illustrates different strategies for both the supply chain members, and incorporates a revenue sharing contract to improve the profit level for both of them. A key contribution is the introduction of a flexible revenue-sharing policy, allowing both the manufacturer and retailer to adjust pricing strategies and revenue shares dynamically across different intervals. Adopting a differential calculus based solution methodology, optimal pricing strategies and the win-win interval for the revenue sharing fraction are found out. It is observed that profits decrease in subsequent intervals under the price-only contract, and is therefore proposed that shared revenue portion should also be reduced in subsequent intervals. The analysis demonstrates how rising cost parameters negatively affect individual profits, highlighting the critical role of revenue-sharing contracts, particularly under adverse business conditions. Furthermore, the importance of preservation technology investment is explored, showing how it can be reorganized to sustain profitability amidst shifting demand patterns. This work provides novel insights into dynamic pricing and supply chain coordination, offering valuable contributions to the literature on perishable goods management and contract optimization.