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Assessing the coordinated revenue-sharing contract of China’s farmer-supermarket direct-purchase model

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  • Liang, Pen
  • Sima, Melat
  • Huang, Yu
  • Sun, Xiaoyu

Abstract

China began connecting farmers directly with supermarkets 10 years ago, when they were at a disadvantage and forced to sell products at low prices, as unstable cooperation among supply chain participants led to inequitable distribution of revenue. Revenue-sharing contracts offer a risk-sharing approach to ensure supply chain coordination and optimize profit for all. Research on short life cycle products with revenue-sharing contracts assume stable prices or investigate the effects of revenue-sharing contracts on supply chain coordination. This study introduced a revenue-sharing contract model into a ‘farmer-supermarket direct-purchase’ supply chain, considering price fluctuation and retail promotional efforts, stochastic market demand, among other factors. Revenue-sharing contracts achieved long-term stability in supply chain coordination, all participants obtained more profits, and the size of revenue-sharing parameter depends on the position and bargaining power of all participants. A case study on Tianhong supermarket and Nanxia farmer cooperative verified these findings, eliciting practical implications for professionals and policymakers.

Suggested Citation

  • Liang, Pen & Sima, Melat & Huang, Yu & Sun, Xiaoyu, 2022. "Assessing the coordinated revenue-sharing contract of China’s farmer-supermarket direct-purchase model," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 25(2), March.
    • Handle: RePEc:ags:ifaamr:320215
    DOI: 10.22004/ag.econ.320215
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    References listed on IDEAS

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    Cited by:

    1. Tianle Tian & Chuiyong Zheng & Liguo Yang & Xiaochun Luo & Lin Lu, 2022. "Optimal Recycling Channel Selection of Power Battery Closed-Loop Supply Chain Considering Corporate Social Responsibility in China," Sustainability, MDPI, vol. 14(24), pages 1-30, December.

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