Abstract
As the agricultural supply chain of is vulnerability due to the dual effects of natural disaster and marketable risk, the paper deals with the optimization of agricultural supply chain by introducing the crop revenue insurance for the first time. Firstly, this paper established the profit model of supply chain without any insurance. Then the crop revenue insurance is introduced into the supply chain, and the impact of supply chain is discussed and profit optimization of the supply chain with yield insurance and crop revenue insurance is analyzed as well. Finally, a numerical example is used to verify the results. The study shows that the supply chain system can be optimized through crop revenue insurance based on the principle of sharing insurance cost and claim, which can make up profit loss of natural risk and market price risk.
Highlights
China is the large agricultural nation since the ancient times
Though the foreign scholars in the agricultural products supply chain has carried out a lot of research of the risk management, but the study of China's agricultural products is relatively poor, especially use the agricultural insurance to transfer the agricultural supply chain risk research are even less
In order to reduce the effects of natural risk and marketable risk of supply chain profit, Decision makers can make a good use of the crop revenue insurance to transfer risks at external, and achieve the goal of both natural and marketable risk management
Summary
China is the large agricultural nation since the ancient times. Agriculture is the foundation of our country's economy. Schuster [2] pointed out that risks can be modified by buying insurance, and be reduced by signing contract terms He proposed that use derivatives to reduce market risk, such as futures, options and forward. Though the foreign scholars in the agricultural products supply chain has carried out a lot of research of the risk management, but the study of China's agricultural products is relatively poor, especially use the agricultural insurance to transfer the agricultural supply chain risk research are even less. Most of the studies focused on the production of agricultural insurance and summarized the experience of foreign crop revenue insurance, but the research that in the quantitative analysis of the impact of supply chain profit under the crop revenue insurance is still in a blank state. This paper can provide a basis gist for the supply chain risk management decision makers
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