Design Of Coordination Mechanism In Supply Chain Of Agricultural Products Based On Motivation Theory

With the fast pace of economy development and increasing level of daily consumption, consumers tend to put more considerations into the quality standard of agricultural products and are in favor of fresh and safe farm produce. In order to improve the decisions of the supply chain of agricultural products, this paper studies the cooperation mechanism between farm products suppliers (producer) and distributors (retailor) to optimize the supply chain process.(1) As the suppliers (producer) efforts will impose significant effects on the quality and sales of a certain agricultural product, game theory and agency problem theory are used to analyze the above situations respectively, that is suppliers’efforts affecting the quality of an agricultural product and the sales of the product, and a motivation system is established under the above two situations to observe the decision and optimization change for both supplier and distributor. Meanwhile, according to centralized decision-making model and separating decision-making model and the supply chain utility analyses, economic analysis result suggests that in the situation of centralized decision-making, the levels of suppliers’effort, products demand and system summed utility are all higher than the levels under separating decision-making.(2) Given a supply chain system where a retailor appoint some producers to process and supply agricultural products, based on the agency problem theory, a motivation binding contract is designed under symmetric information and asymmetric information. Taking into the consideration the existence of adverse choice a retailor may have before signing the contract and moral hazard after signing the contract, the binding contract model is then modified. Finally, economic analysis is used to compare the results with different inputs variables of decision-making and different driving motivations.In the trends of economic integration and marketization, this paper may contribute to the establishment of motivation mechanism and the design of cooperation mechanism of the agricultural supply chain.