Coordination model of quality risk control of the aquatic supply chain based on principal-agent theory

Abstract

Purpose

The purpose of this paper is to identify the risk factors that affect aquatic product quality in the “farming-supermarket docking” condition. This paper investigates how the investment scale can affect earnings and aquatic product quality assurance level. Also, it aims to determine an effective method for increasing aquatic product assurance level, coordinate the supply chain and improve management of the entire supply chain.

Design/methodology/approach

The authors construct a coordination model for quality risk control of the aquatic supply chain by simulating the model in a tilapia supply chain using the case study method. They applied Karush–Kuhn–Tucker conditions to analyze upstream enterprises (breeding base) and downstream enterprises (corresponding supermarket) under the conditions of sufficient or insufficient funds, Further, they consider the relationships among revenue, optimum quality assurance and investment scale at different capital positions; discuss the best cooperation conditions in four cases; and draw conclusions on ways to control quality risk.

Findings

The proposed coordination model is found to be effective in controlling aquatic product quality risk. The simulation results show that when the enterprise funds are sufficient, the sales prices, product freshness, quality assurance ability, collaboration and quality test ability have a positive influence on quality assurance level, whereas coefficient and price sensitivity have a negative influence on it. Additionally, it can obtain high-quality assurance levels and earnings in both breeding bases and supermarkets under the condition of adequate investment.

Originality/value

The study built a coordination model combined with the characteristics of the aquatic supply chain by adding the quality penalty mechanism, product freshness parameters and cost function in the “farming-supermarket docking” mode into the traditional principal–agent model. Research results are beneficial to enhancing the quality assurance level of the aquatic supply chain and improving the coordination level of the supply chain.

Citation

Yan, B., Chen, Z. and Kang, H. (2017), "Coordination model of quality risk control of the aquatic supply chain based on principal-agent theory", Supply Chain Management, Vol. 22 No. 5, pp. 393-410. https://doi.org/10.1108/SCM-10-2016-0375