Option Contracts in Fresh Produce Supply Chain with Freshness-Keeping Effort

This study investigates a supply chain of fresh produce with consideration option contracts and where stochastic market demand depends on freshness-keeping effort. Firstly, we investigate benchmark scenario an integrated freshness effort decreases in both the quality quantity while chain. Secondly, introduce call, put, bidirectional to mitigate risks retailer. A call contract can reduce underage risk, put overage bilateral risks. We derive optimal ordering decisions for retailer contracts, conditions achieving coordination find that results highest price lowest order quantity, initial quantity. Finally, numerical examples are given demonstrate impacts various parameters decision-making. paper provides managerial insights reducing risk chains.