UNCERTAIN DEMAND OF FARMING-ENTERPRISE SUPPLY CHAIN COORDINATION BASED ON THE OPTION CONTRACT

Xiangyang Ren, Yu Ren, Qingmei Li

School of Economics and Management, Hebei University of Engineering, Guangming South Str.199, 056038 Handan, P.R.China

The paper sets up a single-cycle and two-level supply chain model of single rural cooperative and multiple retail enterprises, based on subsidies of option price to combined contract, with the profits maximization of the whole farming-enterprises' supply chain and each member as the goal. It gives the best order quantity and the profits of the whole supply chain and each member under two circumstances, centralized decision and decentralized decision. It also obtains conditions to achieve supply chain coordination. Finally, the paper verifies the model through an example.