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Optimal Decision of Different Fair Reference Points in Supply Chain under “Farmer-Supermarket Direct-Purchase” Mode

DOI: 10.4236/oalib.1105457, PP. 1-17

Subject Areas: Supply Chain Management

Keywords: Fair Reference Point, The Shapley Value, The Nash Equilibrium Solution, Farmer-Supermarket Direct-Purchase

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Abstract

In a two-echelon “Farmer-Supermarket Direct-Purchase” supply chain composed of a supermarket and a farmer, the dominant supermarket used the Nash equilibrium solution and the Shapley value as the fair reference points. By constructing the Stackelberg game model, this paper analyzed the influence of supermarket’s fairness preference on the operation of supply chains and made a sensitivity analysis. The research indicates that supermarket’s fairness preference decreases order prices and the effort level of farmer increases the utility of the supermarket but reduces the income of the farmer. No matter whether the Nash equilibrium solution or the Shapley value is used as the fair reference point of the supermarket, the supply chain cannot be achieved coordination. However, the supply chain can be improved with the Shapley value as the fair reference point. Thus, the farmer, the supermarket and the supply chain tend to use Shapley value as a fairness reference point for the supermarket.

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Qin, Y. and Le, H. (2019). Optimal Decision of Different Fair Reference Points in Supply Chain under “Farmer-Supermarket Direct-Purchase” Mode. Open Access Library Journal, 6, e5457. doi: http://dx.doi.org/10.4236/oalib.1105457.

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