The purpose of this paper is to establish an effective risk assessment approach based on the conditional value-at-risk (CVaR) in the agricultural supply chain.
This study analyzes and assesses the risks of breeding, processing, transportation and warehousing in the agricultural supply chain. The ordered weighted averaging operator is used to sort risk control factors according to their importance and determine the main risk indicators of an enterprise. The CVaR model is utilized to establish the risk loss function, and an improved genetic algorithm is employed to identify the optimal risk control portfolios in the case of the smallest risk loss.
Based on the approach, the optimal combination of risk control to minimize risk losses is determined. Results show that the proportion of capital investment in risk control differs at three confidence levels, and a large amount of money needs to be invested in the production process at the source. Thus, any attempt to control the risks inherent in the agricultural supply chain must begin with the production process at the source.
Supply chain risk management has become increasingly important and significant to the operation and production of enterprises in recent years. The proposed method to assess the risk in the agricultural supply chain can benefit managers in making smart decisions to control total risk.
Conflict of interest: the authors declare that they have no conflict of interest. All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and/or national research committee and with the 1964 Helsinki declaration and its later amendments or comparable ethical standards. This paper does not contain any studies with human participants or animals performed by any of the authors. Informed consent was obtained from all individual participants included in the study.
This work was supported by National Natural Science Foundation of China (71871098), Natural Science Foundation of Guangdong Province (2017A030313415) and Humanities, Social Sciences Research Planning Fund Project of the Ministry of Education (18YJA630127) and Fundamental Research Funds for the Central Universities (2018YBXMPY19).
Yan, B., Wu, J. and Wang, F. (2019), "CVaR-based risk assessment and control of the agricultural supply chain", Management Decision, Vol. 57 No. 7, pp. 1496-1510. https://doi.org/10.1108/MD-11-2016-0808
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