A Research of Central Kitchen Project Investment Decision-making Models from the Perspective of Supply Chain

Abstract

Abstract:

In this study, we investigate the investment decision-making of an independently operated central kitchen project. Mathematical models are developed to analyze the decisions of product quality and pricing strategy by the central kitchen and retailers in 4 types of different supply chain strategies. The impacts of the fixed cost related to quality on the quality of products, price, profit, consumer surplus and social welfare of the project are examined for comparison by means of numerical examples. The results show that the product quality and price are decreasing functions of the fixed cost related to quality. Therefore, technological innovation should be addressed to reduce the fixed cost related to quality for the effective improvement of product quality. In particular, when supply chain coordination is realized between the central kitchen and retailers, the highest product quality, industry profit, consumer surplus and social welfare can be achieved then. Also, compared to the traditional restaurant stores, the central kitchen project can improve the product quality while lower the relative price of products.

Key words: central kitchen, project investment, supply chain, product quality, decision-making models

Cai Yongfeng, Xie Gang, Ren Guangxu. A Research of Central Kitchen Project Investment Decision-making Models from the Perspective of Supply Chain[J]. , 2017, 29(11): 196-205.

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