Abstract
This research aimed to develop a performance based contract model for supply chain risk management based on revenue sharing and with a goal programming approach. The research was conducted on the famous apple juice industry in Batu City, Indonesia in July-August 2020. Data were collected from several informants namely farmers, collectors and apple juice processor. This research shows that collectors play an important role in the sustainability of the supply chain for the apple juice industry. Collector also gets the largest revenue sharing which of course has been agreed upon by the actors in the supply chain and generates fairly fair revenue sharing. Keywords: revenue sharing; sustainable supply chain; risk management; apple juice DOI: 10.7176/EJBM/12-36-08 Publication date: December 31 st 2020
Highlights
Issues related to sustainability currently cause the food supply chain to expand its objectives leading to a triple bottom line approach rather than economic goals (Gómez et al, 2018)
The aim of this study is to develop a performance based contract model for supply chain risk management for apple juice products based on revenue sharing
The supply chain performancebased contract modeling in the Batu City apple agro-industry was chosen for apple juice products with the consideration that this product has a great potential to develop as a processed product for Batu City's iconic apple and its sustainability is expected to be maintained
Summary
Issues related to sustainability currently cause the food supply chain to expand its objectives leading to a triple bottom line approach rather than economic goals (Gómez et al, 2018). Consumers increasingly want to be informed about food safety, the origin and sustainability of the process of creating a product and its delivery (Manning, 2018). The unsustainable supply chain of apple-based food products in Batu City, Indonesia especially apple juice products, is due to several obstacles. These constraints include the SMEs processed apples still depending on middlemen in obtaining raw materials, so that the price of raw materials received by SMEs is much higher than the price of apples at the farmer level (Rayesa et al, 2019)
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