Optimal Decisions and Coordination of Agricultural Supply Chain : Considering Green Production Under Government Subsidies and Uncertain Demand

From the perspective of green development and demand uncertainty, the Stackelberg game models consisting of a farmer and a retailer is constructed, in which the uncertain demand is influenced by the green degree of agri-products. In order to study the impacts of government subsidy on the agricultural supply chain, we explore two types of subsidy policies: one is based on the research and development (R&D) cost of green production, the other one is based on the production cost. The decisions of ordering quantity and green degree under the centralized and the decentralized models with/without government subsidies are separately analyzed. To coordinate the supply chain and explore the feasibility of achieving win-win situation, a revenue and green cost sharing (RCS) contract mechanism is investigated. The study finds that: (1) the decisions made by supply chain members in the decentralized models (with/without subsidies) cannot achieve optimal overall profits; (3) the optimal green degree and the optimal ordering quantity of agri-products in the centralized model are both higher than that in the decentralized model, and which will increase with government subsidies; (4) the RCS contract can coordinate the supply chain and achieve Pareto improvement of the system within a certain range