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Profit distribution mechanism of agricultural supply chain based on fair entropy

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  • Fuzhen Gu
  • Xun Yu

Abstract

This paper constructs a profit distribution model under centralized decision-making by taking the secondary agricultural supply chain as an example. Moreover, it introduces resources and risk as two factors to form significant weights and then designs a fair profit distribution mechanism of the supply chain according to the weights. Finally, this paper solves the optimal solution of the profit distribution coefficient by using fair entropy. Research results find that the distribution according to the optimal profit distribution coefficient can maximize the profit of each actor and achieves the matching of returns and inputs. Therefore, this paper puts forward some suggestions that include establishing a precise distribution mechanism based on contracts or property rights definitions, considering the cost and importance weight of each actor’s input when formulating the profit distribution coefficient, and paying attention to information sharing.

Suggested Citation

  • Fuzhen Gu & Xun Yu, 2022. "Profit distribution mechanism of agricultural supply chain based on fair entropy," PLOS ONE, Public Library of Science, vol. 17(7), pages 1-16, July.
    • Handle: RePEc:plo:pone00:0271693
    DOI: 10.1371/journal.pone.0271693
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    References listed on IDEAS

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    3. Elahi, Ehsan & Khalid, Zainab & Zhang, Zhixin, 2022. "Understanding farmers’ intention and willingness to install renewable energy technology: A solution to reduce the environmental emissions of agriculture," Applied Energy, Elsevier, vol. 309(C).
    4. Elahi, Ehsan & Zhang, Zhixin & Khalid, Zainab & Xu, Haiyun, 2022. "Application of an artificial neural network to optimise energy inputs: An energy- and cost-saving strategy for commercial poultry farms," Energy, Elsevier, vol. 244(PB).
    5. Haifeng Yao & Xiaoxi Ran, 2019. "Profit allocation in agricultural supply chain considering risk factors," International Journal of Manufacturing Technology and Management, Inderscience Enterprises Ltd, vol. 33(3/4), pages 176-188.
    6. Behzadi, Golnar & O’Sullivan, Michael Justin & Olsen, Tava Lennon & Zhang, Abraham, 2018. "Agribusiness supply chain risk management: A review of quantitative decision models," Omega, Elsevier, vol. 79(C), pages 21-42.
    7. Gérard P. Cachon & Martin A. Lariviere, 2005. "Supply Chain Coordination with Revenue-Sharing Contracts: Strengths and Limitations," Management Science, INFORMS, vol. 51(1), pages 30-44, January.
    8. Guoqing Zhao & Shaofeng Liu & Carmen Lopez & Huilan Chen & Haiyan Lu & Sachin Kumar Mangla & Sebastian Elgueta, 2020. "Risk analysis of the agri-food supply chain: A multi-method approach," International Journal of Production Research, Taylor & Francis Journals, vol. 58(16), pages 4851-4876, July.
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