4.6 Article

Differential Game Analysis of Optimal Strategies and Cooperation in Omni-Channel Organic Agricultural Supply Chain

Journal

SUSTAINABILITY
Volume 11, Issue 3, Pages -

Publisher

MDPI
DOI: 10.3390/su11030848

Keywords

sustainability; organic agricultural supply chain; differential game; omni-channel

Funding

  1. National Natural Science Foundation of China [71561018]
  2. Natural Science Foundation of Jiangxi Province of China [20171BAA218002]
  3. Major Projects of the Key Research Base of Humanities and Social Sciences of the Ministry of Education [17JJD790012]
  4. University Humanities and Social Science Project of Jiangxi Province of China [GL162041]
  5. Graduate Innovation Program of Nanchang University [CX2017244]

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This paper aims to investigate the optimal strategies for both centralized and decentralized modes in a two-echelon omni-channel organic agricultural supply chain (OASC) which consists of one farmer cooperative and one online retailer. Furthermore, the contracts of cooperation between the members in OASC are discussed. Based on both theory differential game and bi-level programming, we utilize the Nerlove-Arrow model and Stackelberg model to examine five cases of decision modes for both agents in the OASC. Then, we achieve the optimal strategies where the specified sets of organic growing effort, organic traceability technology effort, propaganda input, and service input can guarantee the maximization of the related profits. As a result, we could obtain the values of the corresponding optimal profits. For the centralized decision mode, the farmer cooperative and the online retailer make decisions with the goal of maximizing the overall profits of the OASC. Meanwhile, for the decentralized decision mode with four different cases, each member will independently make a decision with the goal of maximizing his own profit respectively. In detail, as for the fully decentralized decision mode, no contracts exist in OASC; regarding the decentralized decision mode with an information traceability cost sharing contract, two members pay the information traceability cost together; and for the decentralized decision mode with a revenue sharing contract, two members share the revenue together; as to the decentralized decision mode with a comprehensive contract, there are two cooperative ways that information traceability cost sharing and revenue sharing can be achieved. In addition, we also considered factors such as the consumer preferences of organic products and the cross influence between channels in models. Finally, through sensitivity analysis and comparison of optimal strategies and profits, we found that: (1) high consumer preferences of organic products and high cross influence between channels are profitable; and (2) the choice of contract is influenced by the relative size of the offline marginal income ratio and the online marginal income ratio.

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