Contract farming problems and games under yield uncertainty

Shi, Zhenguo; Cao, Erbao

doi:10.1111/1467-8489.12400

Cited by 10 publications

(7 citation statements)

References 52 publications

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“…We considered a three-level contract-farming supply chain with a risk-averse farmer, a riskaverse retailer, and a supplier who orders the initial FAPs from the farmer and processes and distributes the products to the retailer. We assumed that a production yield uncertainty exists due to the weather and other unpredictable factors [37]. We supposed that the random output factor y is a nonnegative random variable characterized by the cumulative distribution function (CDF) G(y) and probability density function (PDF) g(y).…”

Section: Model Description and Assumptionsmentioning

confidence: 99%

Coordinating a three-level contract farming supply chain with option contracts considering risk-averse farmer and retailer

Liao

Lin

2023

PLoS ONE

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We considered a three-level contract farming supply chain comprising a risk-averse farmer, a risk-neutral supplier, and a risk-averse retailer. The farmer plants and grows fresh agricultural products with yield uncertainty, the supplier is the leader of the supply chain and the designer of the contracts, and the retailer sells processed products with random demand. Under CVaR criterion, this paper discusses three option contracts between the supplier and the retailer, as well as wholesale price contracts or replenishment cost-sharing contracts between the supplier and the farmer. Results show that when the farmer is risk-neutral, option contracts with or without replenishment cost-sharing contracts can maximize the total profit and increase the profits of all members simultaneously. When the farmer and the retailer are risk-averse, only option contracts with replenishment cost-sharing contracts can ensure supply chain full coordination and Pareto improvement by adjusting the option parameters and making the farmer’s sharing ratio equal to his risk aversion coefficient. Moreover, through numerical analysis, we discovered that the interval of the Pareto improvement decreases with the retailer’s risk aversion coefficient and the quantity loss rate, and increases with the farmer’s risk aversion coefficient. The supplier will not be able to increase his own profits when the loss rate is excessively large. Therefore, the leader should consider the risk aversion degree of all parties and the quantity loss rate of fresh agricultural products before choosing contracts.

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Section: Model Description and Assumptionsmentioning

confidence: 99%

Coordinating a three-level contract farming supply chain with option contracts considering risk-averse farmer and retailer

Liao

Lin

2023

PLoS ONE

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“…Bellemare and Novak [21] explain the role of contract farming in structural transformation. Shi and Cao [22] discuss whether agricultural producers are willing to form an alliance in order to jointly deal with the uncertainty of yield in contract farming, which reveals why agricultural producers should form cooperatives, how they should cooperate, and how to design fair profit distribution policy. Ba et al [23] show that the healthy development of contract farming will promote the upgrading of the national rice value chain.…”

Section: Contractmentioning

confidence: 99%

Optimal Financing Decision in a Contract Food Supply Chain with Capital Constraint

et al. 2021

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To solve the financing problem of the food producers, we consider a two-echelon contract food supply chain composed of a family farm with capital constraints and a food processing enterprise. With no capital constraints as the benchmark model, we analyze optimal decisions of the family farm and the food processing enterprise in the case of bank financing with bank participation only and bank financing with “government, bank, and insurance” coparticipation. Then, we discuss how the risk of yield uncertainty influences the optimal decisions and profits of the family farm and the food processing enterprise under different financing situation. Meanwhile, the reason why the government subsidizes agriculture is explored, and the policy of minimum purchase price of the food is initiated when the market price is too low. Finally, the numerical examples and sensitivity analysis are presented. The results show that the bank financing with “government, bank, and insurance” coparticipation improves the welfare of supply chain members more obviously than the bank financing with bank participation only; when the rice price is too low, the policy of minimum purchase price of food is initiated, which increases the revenue and the growing enthusiasm of the family farm; the profits of the family farm and the food processing enterprise will decrease as the risk of yield uncertainty increases in the case of bank financing, and the risk of yield uncertainty will be reduced for the family farm when bank financing with “government, bank, and insurance” coparticipation.

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“…where i , i , t i , , , 1 and 2 are the variables of dual problem (35). The intuition of dual problem ( 35) is similar to the dual problem (5).…”

Section: Concave Investment Cost and Convex Quality Rewardmentioning

confidence: 99%

“…Next, we consider the absence of a refund. For any workers coalition S ⊆ N without a refund, the characteristic profit function (S) with a concave investment cost and a convex quality reward is defined as The dual problem of (37) follows directly from the above similar analysis, which is given by (35) max…”

Section: Concave Investment Cost and Convex Quality Rewardmentioning

confidence: 99%

“…Specifically, the cooperative game theory has become one of the systematic tools in analyzing fair allocation mechanisms and has found numerous applications. For example, Chen and Zhang [ 8 ] uses the cooperative game theory to analyze the cost allocation issue in an inventory centralization game, Shi and Cao [ 35 ] explores a profit allocation policy for the agricultural producers’ cooperative game in contract farming using the cooperative game theory. Thus, we model the profit allocation issue for a workers coalition in crowdsourcing services as a cooperative game, referred to as the capacity pooling games in this paper.…”

Section: Introductionmentioning

confidence: 99%

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Capacity pooling games in crowdsourcing services

Shi

Cao

Nie

2021

Electron Commer Res

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In crowdsourcing services, employers often post some complex (or difficult) tasks that individual workers cannot complete independently. In this paper, we investigate that a group of independent workers willingly form a workers coalition by pooling their capacities together to jointly complete a crowdsourcing task, with the goal of being to obtain a reward from an employer. The capacity pooling games in the crowdsourcing service setting are formulated as optimization problems. Using the duality theory of a linear program, we not only establish that the core of the capacity pooling game is nonempty but also provide a simple way to compute a fair profit allocation policy in the bidding mode, employment mode and contrast mode of crowdsurcing services, respectively. Then, we further analyze the capacity pooling games with concave investment cost and convex quality reward structures, which exhibit the economies of scale and quality incentives. More interestingly, we give a constructive proof to the nonemptiness of the core of the resulting capacity pooling game with nonlinear structures.

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Contract farming problems and games under yield uncertainty

Cited by 10 publications

References 52 publications

Coordinating a three-level contract farming supply chain with option contracts considering risk-averse farmer and retailer

Coordinating a three-level contract farming supply chain with option contracts considering risk-averse farmer and retailer

Optimal Financing Decision in a Contract Food Supply Chain with Capital Constraint

Capacity pooling games in crowdsourcing services

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