Risk decision for dual-channel supply chain of agricultural products under disturbance

Abstract

This paper presents a decision analysis model for the dual-channel supply chain of agricultural products under the disturbance of emergency. Mean variance analysis tool and utility function risk tool are used to describe risk indicators in supply chain. In this study, retailer plays a leading role in agricultural supply chain. By means of the Kuhn-Tucker condition of the retailer’s maximum utility, the optimal price and optimal demand are obtained. The study also shows that risk averse retailer has higher wholesale price, lower retail price and greater supply as well as the demand for the pursuit of greater utility; Supplier has a certain robustness to the sudden event disturbance, when the disturbance is large, the quantity of initial supply quantity will be adjusted. The relationship between the demand change rate of the two channels and the market share of the channel is found. Finally, some numerical examples are presented to illustrate the results. The study provides a possible way of thinking in emergency decision analysis.