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Quality control of a four-echelon agri-food supply chain with multiple strategies

Hu, Jin-you, Zhang, Jian, Mei, Mei, Yang, Wei min, Shen, Qiang
Information processing in agriculture 2019
agricultural products, business enterprises, game theory, market prices, models, product quality, quality control, risk, supply chain
Current research into the supply chain coordination problem of product quality focuses mainly on the two-echelon supply chain, and most coordination models neglect the demand relationship between quantity and quality. Even in a direct sale pattern, an agri-food supply chain involves at least four actors, and the contract between different actors may be different. Here, we present a four-echelon agri-food supply chain that consists of one agricultural producer, one processing enterprise, one distributor, and many consumers. We also analyze the quality decision of each actor based on Stackelberg game theory and develop a combined multiple strategy (profit sharing, quality commitment, and risk sharing) for coordinating quality control in the agri-food supply chain. The results show that these strategies affect quality control at the level of the processing enterprise; however, only the profit-sharing strategy and a quality commitment to consumers affect the product quality from agricultural producers. Product quality is not associated with the profit-sharing contract between the processing enterprise and the distributor. Thus, the quality commitment to consumers is the only way for a processing enterprise to control the food market price. Furthermore, enforcing and enhancing this quality commitment to consumers by the processing enterprise will improve the quality of primary agricultural products and food.