Coordinating the supply chain in the agricultural seed industry

This paper examines contract practices between suppliers and retailers in the agricultural seed industry. We construct and analyze single-retailer models of various contract types actually used in the industry, which include, for example, certain “bonus” and “penalty” features. With no assumption on...

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Bibliographic Details
Published in:European journal of operational research 2008-02, Vol.185 (1), p.354-377
Main Authors: Burer, Samuel, Jones, Philip C., Lowe, Timothy J.
Format: Article
Language:English
Subjects:
Agriculture
Applied sciences
Comparative analysis
Contracts
Coordination
Exact sciences and technology
Logistics
Operational research and scientific management
Operational research. Management science
OR in agriculture
Studies
Supply chain management
Supply chains
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Summary:This paper examines contract practices between suppliers and retailers in the agricultural seed industry. We construct and analyze single-retailer models of various contract types actually used in the industry, which include, for example, certain “bonus” and “penalty” features. With no assumption on the demand distribution, we establish sufficient conditions for contract parameters to guarantee supply chain coordination. Under the assumption of uniform demand, we fully characterize all coordinating contracts. In addition, we compare the models studied herein with other models in the literature and demonstrate that current behavior in the agricultural seed industry is substantively different than that captured by other models. Conversely, we argue why other existing models are not reasonable to implement in the agricultural seed industry.
ISSN:0377-2217
1872-6860
DOI:10.1016/j.ejor.2006.12.015