Coordination of the Agricultural Supply Chain Considering the Production of Green Crops and the Level of Customer Satisfaction

Abstract

By increasing competition in global markets, paying attention to environmental requirements in agricultural supply chain has been more important. The greenness agricultural process mainly affects several issues, such as increasing customer demand, increasing costs of supply chain members over traditional agriculture, and specific conditions for holding crops. also increasing customer satisfaction on the proposed products and services is the necessary condition for a successful supply chain. In this study, a two-level agricultural supply chain is investigated; farmer determines the greenness degree of crops, and retailer increases the customer satisfaction level by making the necessary investments. The contribution of this research is specifically the optimization of the final customer satisfaction level as a decision variable in agricultural supply chain and the simultaneous examination of three variables of price, the greenness degree of crops and the customer satisfaction level in the final customer demand function. In the modeling process, first, decentralized and centralized approaches are developed. Subsequently, by using revenue sharing contract, the chain members have attained into a win-win relationship. In the numerical results, the tomato industry is examined and the results show that the supply chain will reach the optimal profit obtained through the centralized approach after the contract.

Keywords

• two-level agricultural supply chain
• environmental requirements
• customer satisfaction
• centralized decision making
• revenue-sharing contract