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Academic Journal of Engineering and Technology Science, 2020, 3(5); doi: 10.25236/AJETS.2020.030519.

Optimal price and output in Internet + Agricultural Supply Chain

Author(s)

Yuting Xu

Corresponding Author:
Yuting Xu
Affiliation(s)

College of Management, Shanghai University, Shanghai 200444, China
*Corresponding author e-mail: xytrue@shu.edu.cn

Abstract

Under the innovative model of "Internet + Agriculture", selling agricultural products through e-commerce platforms is already a new way of agricultural development. Considering the heterogeneity of consumers' preference for agricultural products quality, this article studies the output and optimal pricing of agricultural products in the agricultural supply chain composed of e-commerce platforms and farmers. We build mathematical models for problems and obtain analytical solutions. We found that when the market demand is low and the quality of agricultural products is high, both farmers and platforms can get high profit remuneration, and when factors such as abundant funds or vast geographical areas lead to large agricultural products, the quality requirements can be appropriately relaxed. However, if the quality of agricultural products is low, farmers' profits will be squeezed indefinitely by the platform, resulting in no profit. At this time, farmers will not participate in the cooperation. When the market demand is infinite, although a seller's market will be formed, if the output is not limited by geographical restrictions and the output is also infinite, then the cost will be too high and it will not be profitable.

Keywords

Internet + Agriculture supply chain, Optimal price, output of agricultural products, agricultural products quality, consumer utility

Cite This Paper

Yuting Xu. Optimal price and output in Internet + Agricultural Supply Chain. Academic Journal of Engineering and Technology Science (2020) Vol. 3 Issue 5: 152-158. https://doi.org/10.25236/AJETS.2020.030519.

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