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Risk Transfer Mechanism for Agricultural Products Supply Chain Based on Weather Index Insurance
Joint Authors
Huang, Shengzhong
Li, Jiawen
Li, Yujie
Sun, Xiangkai
Fu, Hong-Yong
Source
Issue
Vol. 2018, Issue 2018 (31 Dec. 2018), pp.1-17, 17 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2018-08-14
Country of Publication
Egypt
No. of Pages
17
Main Subjects
Abstract EN
The risk management for agricultural products supply chain is more complex than that for typical manufacturing supply chain.
Agricultural production is vulnerable to severe weather such as heavy rain, cyclones, and cold wave, which challenges the matching of random output with random demand for agricultural products supply chains.
The goal of this paper is to design an effective risk transfer mechanism for managing severe weather risks so as to ensure the stable operation of the agricultural products supply chain.
We study the coordination of two-level agricultural products supply chain with a single company and a single farmer under the influence of severe weather.
Taking rainstorm weather as an example, this paper designs a risk transfer mechanism based on weather index (rainfall) insurance: “rainfall index insurance + revenue sharing + risk transfer fee.” It is found that this risk transfer mechanism can overcome distortion of the farmer’s agricultural investment level under the influence of severe weather.
When the contract parameters meet certain conditions, using the risk transfer mechanism can achieve the supply chain coordination and a win-win situation.
More importantly, weather change does not affect the Pareto improvement of the company and the farmer under the risk transfer mechanism.
In addition, we also find that the company can incentivize the farmer to purchase weather index insurance and use the insurance market to shift the severe weather risk encountered during the agricultural production to protect the company’s and farmer’s income and the stable operation of the supply chain.
American Psychological Association (APA)
Fu, Hong-Yong& Li, Jiawen& Li, Yujie& Huang, Shengzhong& Sun, Xiangkai. 2018. Risk Transfer Mechanism for Agricultural Products Supply Chain Based on Weather Index Insurance. Complexity،Vol. 2018, no. 2018, pp.1-17.
https://search.emarefa.net/detail/BIM-1133231
Modern Language Association (MLA)
Fu, Hong-Yong…[et al.]. Risk Transfer Mechanism for Agricultural Products Supply Chain Based on Weather Index Insurance. Complexity No. 2018 (2018), pp.1-17.
https://search.emarefa.net/detail/BIM-1133231
American Medical Association (AMA)
Fu, Hong-Yong& Li, Jiawen& Li, Yujie& Huang, Shengzhong& Sun, Xiangkai. Risk Transfer Mechanism for Agricultural Products Supply Chain Based on Weather Index Insurance. Complexity. 2018. Vol. 2018, no. 2018, pp.1-17.
https://search.emarefa.net/detail/BIM-1133231
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1133231