Research On Agricultural Supply Chain Coordination Based On Option And Spot Market

In recent years, with the rapid development of China’s agricultural economy, agricultural supply chain has been a hot research issue during the scholars, and the most important issue of agriculture is coordination. The agricultural supply chain is composed by different economic entities, they all make decision according to their own maximum profit. However, every economic entity’s goal always conflict with the agricultural supply chain system, so it leads to double marginalization. In order to optimize decisions of agricultural supply chain, each member of the agricultural supply chain not only optimizes its own goal but also must consider the influence of its decision-making to other members and the whole of the agricultural supply chain, then achieve the overall optimized goal. So we need to set up a contract to coordinate the agricultural supply chain.Supply chain option contract is a new direction researched by domestic and overseas scholars about supply chain contracts. Option contract can not only coordinate the supply chain through setting relevant contract parameters, but also lower the supply chain risks at a certain degree. This paper tries to introduce the option contract to agricultural supply chain on the basis of previous research on industry products. We set up agricultural supply chain option contract coordination model according to the characteristics of agricultural products.In this paper, we consider the agricultural supply chain composed by company, cooperative organization and farmer. Firstly we set up every decision model of agricultural supply chain under option contract. Then we get the optimal order strategy with the goal of maximizing agricultural supply chain profit, and give the option contract parameter should meet the conditions established by the cooperative organization under optimal conditions. Through simulation analysis, it comes to the wholesale price of the company’s purchases, option purchases are affected by the wholesale price, the option price and the option exercise price, thereby affecting the profits of companies and cooperatives. So when cooperatives make pricing policies, it should take from the supply chain overall perspective, then make the company’s optimal order quantity to match the overall supply chain optimal order quantity, and through making price adjustment parameters, to achieve a reasonable distribution of profits.And then we discuss agricultural supply chain coordination and optimization problem under the both option contract and spot market, and it improves the cooperative organization and the company’s decision model compared to only under option contract market. Under this condition we also get company’s the optimal ordering strategy and the option contract parameters’equation should meet. In addition, we find that cooperatives organization need to consider the influence caused by spot market price and the probability of selling the surplus agricultural products after we consider both contract market and spot market. Finally use an example to prove the model, and do the sensitivity analysis about the spot market price.This paper, combining present situation of agricultual supplychain development, study model of agricultural supply chain under contract market and agricultural supply chain coordination and optimization problem under the both option market and spot market, which has realistic significance and can be used as reference to enhance the production decision-making levels, increase the economic benefits, and improve competitive strengths of enterprises.