FOOD SUPPLY CHAIN PLAYERS: WITH DIRECT AND TRADITIONAL CHANNELS

Abstract [English]

We study a dual channel supply chain in perishable agricultural products. In which one channel is producer (farmer) sells the produce directly to the customer and the other channel is about transfer of produce to different channel players and reach the final customer. Consumers choose the purchase channel based on price, availability, accessibility, product quality, trust-ability and service qualities. The producer decides the price of the direct channel and the intermediaries decides both price and order quantity in the traditional method. We show that the difference in problem faced by the producers’ of the two channels plays an important role in determining the existence of dual channels in equilibrium. For the study Erode and Kanyakumari districts were chosen purposively. A sample of 80 farmers was selected randomly who are involved in both of the channels. In the case that the producer and the retailer coordination and to follow a centralized decision approach, we find that a direct channel will be an optimum solution for improving the overall effectiveness. Our results show that an increase in retailer’s service quality may increase the producer’s profit in dual channel and a larger range of consumer service sensitivity may benefit both parties in the dual channel. The results suggest that both the channel have problem and the optimum solution lies in between two channels.