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Abstract
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.
Highlights
In the planting process of organic agriculture, soluble mineral fertilizers, synthetic herbicides, and pesticides are forbidden, and the environmental impacts of organic agriculture include lower emissions of CO2, N2O, and CH4, enhanced soil and water quality, higher energy efficiency per land area and so on [1]
The concentration of antioxidants in organic foods is higher than non-organic foods, while the level of toxic heavy metals like cadmium and pesticides residues are lower in organic foods [3,4]
This paper focuses on competition and cooperation between the farmer cooperative and the online retailer in the omni-channel organic agricultural supply chain (OASC)
Summary
In the planting process of organic agriculture, soluble mineral fertilizers, synthetic herbicides, and pesticides are forbidden, and the environmental impacts of organic agriculture include lower emissions of CO2, N2O, and CH4, enhanced soil and water quality, higher energy efficiency per land area and so on [1]. Organic agriculture and organic food are good for human health, such as reducing the risk of allergic disease and of overweight and obesity, with modestly higher contents of phenolic compounds in organic fruit and vegetables [2]. The concentration of antioxidants in organic foods is higher than non-organic foods, while the level of toxic heavy metals like cadmium and pesticides residues are lower in organic foods [3,4]. The consumption of organic food has steadily risen over the past two decades [9]. Sustainable production and sustainable consumption are mutually reinforcing and indispensable, which are the main ways to achieve sustainable development [10]
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