Study of the Option Ordering Policy concerning Perishable Farm Produce Based on Revenue Sharing Contract

This paper considers the two-echelon supply chain system which consists of single agricultural producers and retailers, and analyzes the impact of sharing ratio on the option ordering quantity, and retailers and producers' expected profits. Studies have shown that in the case of decentralization, when the revenue sharing ratio is between 0 and 0.3, the option ordering quantity of farm produce is a decreasing function of the sharing ratio; when the revenue sharing ratio is between 0.3 and 1, the option ordering quantity of farm produce is an increasing function of sharing ratio; when the revenue sharing ratio is between 0.421 and 1, the agricultural producers and retailers' expected profits are an increasing function of sharing ratio. Finally, through the numerical calculation, the applicability of the conclusions is verified, to provide a reference for the supply chain management practices.