Joint Purchasing Policy for Perishable Products Based on Cooperative Game Theory

In order to reduce purchasing cost, and maintain long competitiveness, enterprises often adopt joint purchasing policy. A cost allocation model for retailers' joint purchasing perishable items was established based on the characteristics of perishable products. In this model, the cost allocation problem of jointly purchasing perishable products among retailers was converted into a cost allocation game based on the cooperation game theory. Analysis of retailer's behaviors proves that the cost allocation game is concave, and there exists an optimal joint purchasing policy. The results show that joint purchasing saves the fixed ordering cost and the total cost per unit time for every retailer, and the cost saving increases with the decay rate. In addition, when considering the coordination cost, if the ratio of the fixed ordering cost to the sum of inventory cost and purchasing cost is decreasing, the corresponding cost allocation game satisfies subadditivity and has nonempty core.