Research On Option Contracts Of Agricultural Product Supply Chain Under Random Yield And Stochastic Demand

The randomness of yield and demand in the supply chain management of agricultural products is an important reason for the imbalance of supply and demand of agricultural products.The sales income of agricultural products is the main economic source of farmers,and the uncertainty of yield and demand will inevitably affect the income level of farmers.How to arrange production and order reasonably becomes a difficult problem in the decision-making process of supply chain managers.In this paper,a two-echelon supply chain of agricultural products with random yield and stochastic demand is taken as the research object.We establish Stackelberg game model under single ordering option contract and mixed ordering option contract respectively from retailer-led and supplier-led supply chains.Using the reverse induction method to solve the optimal production input strategy of the supplier and the optimal ordering strategy of the retailer,the expected profits of the supplier and the retailer in different order modes are also discussed.The main research contents and conclusions are summarized as follows.(1)When the retailer dominates,compared with the wholesale price contract,we found that the optimal option orders and the expected profit of the retailer,the optimal production inputs and the expected profit of the supplier under the single ordering basic option contract mode are all increased,yet the supply chain still did not get coordinated.Through improving the basic option contract,the supply chain can achieve the coordination under some certain conditions.(2)When the supplier dominates,the optimal fixed order quantity under the mixed ordering mode of basic option contract is less than the order quantity under wholesale price contract mode,while the optimal total order quantity is greater than the order quantity under wholesale price contract mode.In addition,the expected profit of the retailer,the optimal production inputs and the expected profit of the supplier under the mixed ordering basic option contract mode are all increased,however,the supply chain still not reach the coordination.Improved the basic option contract,we found that the channel can realize the coordination under some certain conditions as well as improve the expected profits of the supplier and the retailer.Through sensitivity analysis,we study the correlations between decision variables,the expected profits and several parameters.So as to provide decision-making advice and theoretical support for the producer and the retailer of agricultural products.