Economic Analysis Of Farm Produce Traceability System And Implementing Design

Traceability system as a new tool applied in farm produce logistic has attracted more and more attention in recent years. Although high expectation has put on the information technology to solve food safety problem, both government and industry has not been much aware of the changes in organization and cost-benefit.This dissertation aims to summarize the basic rule of implementing traceability system by using modeling and case study method. The model interprets the influence of asymmetric information on two kinds of producer; the high-grade producer prefers information transparency than low-grade producer, they setup their reputation at the cost of premium for asymmetric information. Also the relation of cost on regulation vs. loss of food-borne illness; loss on traceability vs. level of management has been discussed.It is from company and government two points of view respectively when discussing the basic rule of implementing traceability. Traceability is the need of reducing transaction cost when hierarchy cost within vertically integrated companies is too high. Its benefit highly depends on the scale and the management efficiency of the company. Traceability system brought to government much more flexibility when considering the limited budget, its cost should be allocated between company and government reasonably.At the end, a case is studied to illustrate the rule discussed previously. Company should thoroughly analysis the cost-benefit of implementing traceability system; try its best to incorporate into existing system to lower its cost and make maximize use of all the possible function, especially the management to help keeping the agreement.