Dual-Channel Supply Chain of Agricultural Products under Centralised and Decentralised Decision-Making

Abstract

The rise of rural e-commerce, accelerated by the COVID-19 pandemic, has driven agricultural development, resulting in a dual-channel model that combines offline supermarket docking with online e-commerce direct sales. Furthermore, given the perishable nature of most agricultural products, consumers exhibit a preference for high-quality logistics services. This paper analyses the dynamics of the agricultural supply chain, beginning with the “leading enterprises + farmers” production mode, and establishes two optimal decision-making models for online and offline dual-channel agricultural supply chains, incorporating logistics service levels. The first model considers centralised decision-making, where leading agricultural producers and community superstores make decisions simultaneously, aiming to maximise the overall profit of the supply chain. The second model addresses decentralised decision-making in which the producer, as the dominant player in a Stackelberg game, anticipates the reactions of retailers and sets the wholesale price, online sales price, and online logistics service level accordingly. Retailers, as followers, then determine the offline sales price and offline logistics service level based on the producer’s decisions. Finally, we conduct a sensitivity analysis of the proposed models. Our findings reveal that as consumer focus on logistics service levels increases, the overall profit of the supply chain improves, and as the unit logistics cost corresponding to the level of logistics service increases, the marginal benefits of decreasing profit brought about by the increase in unit logistics cost also decrease.

Keywords

• agriculture supply chain
• optimal decision-making
• online and offline channel
• centralised and decentralised decision-making