Design Of A Dairy Product Supply Chain Coordination Mechanism Considering Risk Appetite And Risk Sharing

Our country’s dairy industry has great development prospects,but the dairy supply chain still faces many challenges in its further development.The each member of the dairy product supply chain always makes decisions based on their own interests under decentralized decision-making,and the uncertainty of production and demand brings huge risks to small-scale and weak anti-risk suppliers and retailers,resulting suppliers and retailers with a risk-averse attitude always do not pursue profit maximization when making decisions,so that the system decision-making efficiency is low.Because the revenues and risks of the many entities in the dairy supply chain are not evenly distributed,and because suppliers and retailers are risk averse,effective information sharing cannot be achieved.These eventually lead to the double marginal effect and bullwhip effect in the dairy supply chain,and the coordination of the supply chain cannot be achieved.Therefore,when the output and demand are uncertain,how can the manufacturer,as the leader,develop different contract mechanisms for different risks while taking into account the risk aversion of suppliers and retailers in order to share risks and achieve supply chain coordination has become a pressing issue that must be addressed.Based on the above statement,this paper designs the coordination mechanism of the dairy product supply chain around the uncertainty of production and demand,the risk preference attitude of each member of the supply chain,and the sharing of risks.This study uses the CVa R method to measure the risk preference of each member of the supply chain,uses the probability distribution function to represent the uncertainty of yield and demand,and then uses the game to analyze the dairy supply chain.First,the decision analysis and coordination of the downstream supply chain of dairy products will be carried out in response to demand uncertainty.In the downstream supply chain of dairy products,the decision under the wholesale price contract will be analyzed first,then two-part tariff contracts and revenue-sharing portfolio contracts(ZRS contracts)will be introduced.The influence of risk aversion on the optimal order quantity and the profit change of each member need to be analyzed under these two contracts.Then,the decision analysis and coordination mechanism design of the upstream supply chain of dairy products will be carried out according to the uncertainty of the supplier’s output.This part also compares and analyzes centralized decision-making and decentralized decision-making,calculates the optimal planned output when the two decisions are made,and analyzes the impact of supplier risk aversion on the supply chain.After that,we need to design a risk sharing coordination mechanism.Specifically,if the supplier’s output is insufficient and needs to be purchased at a high price from other markets,the manufacturer will provide a cost-sharing contract,and if the supplier’s output is too large and cannot be fully sold,the manufacturer will provide a repurchase contract.Finally,based on the above theoretical research results,we will take Yiming food supply chain as an example to carry out numerical simulation and give corresponding management inspiration.This study yielded the following results.First,when the wholesale pricing contract is used in the dairy downstream supply chain,the risk-averse retailer’s optimal order quantity is lower than the overall system decision’s ideal order quantity,that is,the wholesale price contract cannot reach a coordinated state,and the probability distribution function of market demand is always less than retailer risk aversion.Secondly,the study found that both the ZRS contract and the two part tariff contracts can achieve supply chain coordination and maximize profits.Among them,the ZRS contract can transfer the risk of retailer demand uncertainty to the manufacturer,effectively reducing the retailer’s risk.Finally,this paper studied the upstream supply chain of dairy products and found that when the manufacturer provides the supplier with the risk sharing contract,the optimal planned output of the supplier can be reduced,the risk of the supplier can be effectively reduced,and finally the coordination of the supply chain can be achieved.