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Decision-Making on the Supply Chain of Fresh Agricultural Products with Two-Period Price and Option Contract

Author

Listed:
  • Bo Yan

    (School of Economics and Finance, South China University of Technology, Guangzhou Higher Education Mega Centre, Panyu District, Guangzhou 51006, P. R. China)

  • Gaodi Liu

    (School of Economics and Finance, South China University of Technology, Guangzhou Higher Education Mega Centre, Panyu District, Guangzhou 51006, P. R. China)

  • Xiaohua Wu

    (School of Economics and Finance, South China University of Technology, Guangzhou Higher Education Mega Centre, Panyu District, Guangzhou 51006, P. R. China)

  • Jiwen Wu

    (School of Economics and Finance, South China University of Technology, Guangzhou Higher Education Mega Centre, Panyu District, Guangzhou 51006, P. R. China)

Abstract

The price risk of fresh agricultural products has been a significant topic in recent years. Taking the two-level fresh agricultural product supply chain as the research object, this paper studies the optimal ordering and coordination of supply chain based on two-period price, wholesale price and option contract. The optimal order decision of the retailer at the single period price and the optimal decision corresponding to the supplier are obtained when the output of the supplier is uncertain under decentralized decision-making. The range of penalty cost parameter that avoids supplier default is also obtained. The effect of two-period price on the optimal order decision and supply chain profits is discussed when the production yield of the supplier is fixed. Cost-sharing contract is introduced to increase the order quantity and achieve coordination because the option contract cannot completely make the supply chain coordination with two-period price. This paper provides a low-cost approach that can be applied in fresh agricultural supply chain to solve financing and order problems.

Suggested Citation

  • Bo Yan & Gaodi Liu & Xiaohua Wu & Jiwen Wu, 2021. "Decision-Making on the Supply Chain of Fresh Agricultural Products with Two-Period Price and Option Contract," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 38(01), pages 1-22, February.
    • Handle: RePEc:wsi:apjorx:v:38:y:2021:i:01:n:s0217595920500384
    DOI: 10.1142/S0217595920500384
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    Citations

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    Cited by:

    1. Linwei Pan & Xueyu Liao & Rui Li & Shuangping Cao, 2023. "The Industrial Decision Analysis of Regional Coordinated Development Considering Information Distribution and Fairness Preference," Sustainability, MDPI, vol. 15(22), pages 1-20, November.
    2. Wenxue Ran & Yajing Chen, 2023. "Fresh Produce Supply Chain Coordination Based on Freshness Preservation Strategy," Sustainability, MDPI, vol. 15(10), pages 1-24, May.
    3. Qing Yang & Lei Xiong & Yanfeng Li & Qian Chen & Yijing Yu & Jingyang Wang, 2022. "Contract Coordination of Fresh Agri-Product Supply Chain under O2O Model," Sustainability, MDPI, vol. 14(14), pages 1-20, July.
    4. Zhinan Li & Qinming Liu & Chunming Ye & Ming Dong & Yihan Zheng, 2022. "Achieving Resilience: Resilient Price and Quality Strategies of Fresh Food Dual-Channel Supply Chain Considering the Disruption," Sustainability, MDPI, vol. 14(11), pages 1-24, May.
    5. Esteve Nadal-Roig & Lluís Miquel Plà-Aragonès & Víctor Manuel Albornoz, 2023. "Supply Chains: Planning the Transportation of Animals among Facilities," Sustainability, MDPI, vol. 15(3), pages 1-14, January.
    6. Shizhen Bai & Xuelian Jia, 2023. "The Impact of the Cost-Sharing Contract on Capital-Constrained Agricultural Supply Chains," SAGE Open, , vol. 13(1), pages 21582440231, February.
    7. Ming Luo & GuoHua Zhou & Hao Xu, 2022. "RETRACTED ARTICLE: Three-tier supply chain on temperature control for fresh agricultural products using new differential game model under two decision-making situations," Operations Management Research, Springer, vol. 15(3), pages 1028-1047, December.
    8. Deng Jia & Chong Wang, 2022. "Option Contracts in Fresh Produce Supply Chain with Freshness-Keeping Effort," Mathematics, MDPI, vol. 10(8), pages 1-24, April.

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