Game Model of Agricultural Product Supply Chain Under Hybrid Ordering and Option Contracts with Random Yield and Random Demand
- 1School of Economics and Management, Beijing Institute of Petrochemical Technology, Beijing 102617, China
- 2Development Research Centre of Beijing New Modern Industrial Area, Beijing 102617, China
Abstract
This paper investigates the impacts of hybrid ordering option contracts—combining fixed procurement and flexible option-based ordering—on the decision-making and profits of supply chain members in an agricultural product supply chain characterized by dual randomness in production yield and market demand. Within a Stackelberg game framework where the supplier acts as the dominant leader, we first establish a wholesale price contract benchmark model. We then formulate a basic hybrid ordering option contract model and derive the retailer’s optimal fixed order quantity, optimal option order quantity, and the supplier’s optimal production input level. On this basis, we propose an improved hybrid ordering option contract model that incorporates an emergency ordering strategy, and derive the parameter conditions for achieving supply chain coordination. The analytical results reveal that the basic option contract improves expected profits for both parties but fails to achieve full coordination. In contrast, the improved contract achieves full coordination when the emergency ordering price is set such that the supplier prefers emergency orders over salvage, a condition explicitly derived in the coordination analysis. Furthermore, Pareto improvement is attained when the improved contract satisfies this condition, ensuring that neither party is worse off compared to the basic contract scenario. Sensitivity analysis further examines how key parameters—including the wholesale price, option purchase price, and option exercise price—affect optimal decisions and expected profits. The findings provide theoretical references for the practical management of agricultural product supply chains.
Related
- Equilibrium Analysis of Power Structure and Farmer Risk Aversion in Green Technology Outsourcing for Agricultural Supply Chains
- Spectral Analysis for Multi Scale Supply Chain Dynamics and Residue-Based Resonance Extraction in Hybrid-Vehicle Systems
- American condor contracts with a cash component: A variational inequality approach
- Distributed Model Predictive Control with Connectivity-based Contracts
- Forcing and duality-corrected contracts for volatility control
BibTeX
@article{zheng2026game,
title = {{Game Model of Agricultural Product Supply Chain Under Hybrid Ordering and Option Contracts with Random Yield and Random Demand}},
author = {Jialin Zheng},
journal = {Mathematics},
year = {2026},
month = oct,
doi = {10.3390/math14203745},
url = {https://www.mdpi.com/2227-7390/14/20/3745},
note = {CC BY 4.0},
}
RIS
TY - JOUR
TI - Game Model of Agricultural Product Supply Chain Under Hybrid Ordering and Option Contracts with Random Yield and Random Demand
AU - Jialin Zheng
PY - 2026
DA - 2026/10/15
JO - Mathematics
DO - 10.3390/math14203745
UR - https://www.mdpi.com/2227-7390/14/20/3745
AB - This paper investigates the impacts of hybrid ordering option contracts—combining fixed procurement and flexible option-based ordering—on the decision-making and profits of supply chain members in an agricultural product supply chain characterized by dual randomness in production yield and market demand. Within a Stackelberg game framework where the supplier acts as the dominant leader, we first establish a wholesale price contract benchmark model. We then formulate a basic hybrid ordering option contract model and derive the retailer’s optimal fixed order quantity, optimal option order quantity, and the supplier’s optimal production input level. On this basis, we propose an improved hybrid ordering option contract model that incorporates an emergency ordering strategy, and derive the parameter conditions for achieving supply chain coordination. The analytical results reveal that the basic option contract improves expected profits for both parties but fails to achieve full coordination. In contrast, the improved contract achieves full coordination when the emergency ordering price is set such that the supplier prefers emergency orders over salvage, a condition explicitly derived in the coordination analysis. Furthermore, Pareto improvement is attained when the improved contract satisfies this condition, ensuring that neither party is worse off compared to the basic contract scenario. Sensitivity analysis further examines how key parameters—including the wholesale price, option purchase price, and option exercise price—affect optimal decisions and expected profits. The findings provide theoretical references for the practical management of agricultural product supply chains.
SN - 2227-7390
ER -