TY - JOUR
T1 - Platform logistics or self-logistics? Restaurants’ cooperation with online food-delivery platform considering profitability and sustainability
AU - Niu, Baozhuang
AU - Li, Qiyang
AU - Mu, Zihao
AU - Chen, Lei
AU - Ji, Ping
N1 - Funding Information:
The authors are grateful to the editor and reviewers for their helpful comments. This work was supported by NSFC Excellent Young Scientists Fund (No. 71822202 ), Chang Jiang Scholars Program (Niu Baozhuang 2017), and the Fundamental Research Funds for the Central Universities . The corresponding author is Zihao Mu. The work described in this paper was partially supported by the grant from The Hong Kong Polytechnic University , China (Project No. SB2W).
Publisher Copyright:
© 2021 Elsevier B.V.
Copyright:
Copyright 2021 Elsevier B.V., All rights reserved.
PY - 2021/4
Y1 - 2021/4
N2 - Online food-delivery platforms provide accessible marketplaces for fast-food restaurants. However, who should take charge of logistics, especially when there is increasing consumption of plastic containers, utensils, and other single-use items? In practice, either platform logistics or restaurant's self-logistics is available. For the former, customers pay for food and logistics services separately, while for the latter, “food & logistics” is sold in a bundle. Using game-theoretical approach, we consider a fast-food restaurant selling food in both online and physical stores, which cooperates with an online food-delivery platform under commission contract, and opts to use the platform logistics or self-logistics to deliver online orders. Interestingly, we find that the online “food & logistics” price under two logistics strategies exhibit opposite relationships with respect to the commission rate, and the restaurant's offline food price might first increase and then decrease in the online commission rate. Consequently, the restaurant prefers to use platform logistics when its online market potential is low. We show that the restaurant's preference for platform logistics is non-monotonic in the online market potential. Using the sales quantity-based environmental index (EI) to measure the sustainability performances under the two logistics strategies, we find that the platform logistics strategy is more environment-friendly when the online market potential is high.
AB - Online food-delivery platforms provide accessible marketplaces for fast-food restaurants. However, who should take charge of logistics, especially when there is increasing consumption of plastic containers, utensils, and other single-use items? In practice, either platform logistics or restaurant's self-logistics is available. For the former, customers pay for food and logistics services separately, while for the latter, “food & logistics” is sold in a bundle. Using game-theoretical approach, we consider a fast-food restaurant selling food in both online and physical stores, which cooperates with an online food-delivery platform under commission contract, and opts to use the platform logistics or self-logistics to deliver online orders. Interestingly, we find that the online “food & logistics” price under two logistics strategies exhibit opposite relationships with respect to the commission rate, and the restaurant's offline food price might first increase and then decrease in the online commission rate. Consequently, the restaurant prefers to use platform logistics when its online market potential is low. We show that the restaurant's preference for platform logistics is non-monotonic in the online market potential. Using the sales quantity-based environmental index (EI) to measure the sustainability performances under the two logistics strategies, we find that the platform logistics strategy is more environment-friendly when the online market potential is high.
KW - Environmental impact
KW - Logistics strategies
KW - Online food-delivery
KW - Platform operations
UR - http://www.scopus.com/inward/record.url?scp=85101095902&partnerID=8YFLogxK
U2 - 10.1016/j.ijpe.2021.108064
DO - 10.1016/j.ijpe.2021.108064
M3 - Journal article
AN - SCOPUS:85101095902
VL - 234
JO - International Journal of Production Economics
JF - International Journal of Production Economics
SN - 0925-5273
M1 - 108064
ER -