"Farm-Supermarket Docking" Supply Chain Demand Risk Control Based On The Option Contract

In recent years,the agricultural reform in China has been continuously promoted to the marketization,the supply chain of agricultural products has been widely concerned by scholars.The model of agricultural product direct production has gradually developed with the "agricultural production cooperative + supermarket".Although this model can solve the conflict between supply and demand,namely,"small production" and "big market",this model exists defects.“Farm-Supermarket Docking” cut some circulation links,the frequency of the risk caused by the long circulation links is reduced,but at the same time,it also transfers individual risk,even enlarges,such as the demand risk.Therefore,in order to coordinate the relationship between the risks and stakeholders in the "Farm-Supermarket Docking" supply chain,this paper introduces the option financial derivatives to establish a supply chain contract mechanism.The option contract enables the supply chain to reduce the potential profit loss caused by the shortage or reduce the cost rise caused by the backlog of the final inventory at a certain cost.It not only gives the supply chain a certain amount of flexibility but matches the supply and demand.From the perspective of risk management,it is of great practical significance to make use of the options to serve the development of agricultural real economy.The following questions are studied in this paper:Firstly,this paper systematically analysis of "Farm-Supermarket Docking" supply chain.Through the differentiation and analysis of the related concepts of "Farm-Supermarket Docking" supply chain,the operation mode of "Farm-Supermarket Docking" is expounded from the perspective of contract and integration.Combining supply chain contract theory and risk management theory of agricultural supply chain,the research shows that:demand risk is one of the most important risks in the supply chain of "Farm-Supermarket Docking".Secondly,this paper identifies the demand risks of "Farm-Supermarket Docking".Based on the two dimensions of formation process of demand and phenomenon of supply affecting demand,we summarize the sources of demand risk of "Farm-Supermarket Docking" supply chain.The research results show that: the source of demand risk of "Farm-Supermarket Docking" supply chain involves three categories,which includes consumers' personal basic information,the understanding of "Farm-Supermarket Docking" model and consumer buying behavior.According to the above-mentioned conclusions,the relevant data are collected through the questionnaire survey,and we analyze and processed the data and established the Logit model.Also we have used the SPSS software to deal with the collected data.The result shows that: the consumer buying behavior is the key factor which affects the demand risk of "Farm-Supermarket Docking" supply chain.Besides,according to the difference ofconsumers' purchase behavior,consumers are divided into strategic consumers and non strategic consumers.Thirdly,we introduce the option contract mechanism,establish the demand risk control model of "Farm-Supermarket Docking" supply chain based on the option contract,and discuss the optimal initial order quantity and the option purchase quantity of the supermarket.Then we use the MATLAB for analyzing numbers and the ExtendSim for simulating examples.The results show that:(1)the increase of the proportion of the strategic consumer,and the increasing demand volatility of agricultural product market makes the "Farm-Supermarket Docking" supply chain facing more demand risk.(2)in the demand risk control model of the "Farm-Supermarket Docking" supply chain based on the option contract,the optimal initial order quantity and the optimal option purchase of the supermarket are negative with the option price and the executive price of the agricultural products.The optimal order quantity of the supermarket is more sensitive to the change of the executive price of the option.When the price of the option is more than 10%,the order of the best option of the supermarket drops rapidly until the executive option is abandoned.In conclusion,option contract can effectively control the "Farm-Supermarket Docking" supply chain demand risk.Finally,according to the development status of "Farm-Supermarket Docking" and the conclusion of this paper,this paper puts forward some suggestions to promote the effective control of the demand risk of "Farm-Supermarket Docking" from three angles of deepening the reform of the option price mechanism of agricultural products,promoting the construction of the option market of agricultural products,and innovating the model of the option service of agricultural products.The supporting measures for the demand risk of the supply chain are open information sharing,interconnection between upstream and downstream enterprises,and building green channels to improve the circulation mode of agricultural products.