Study on Pricing Model of Agricultural Products based on Option Contracts in the Perspective of Farmer-Supermarket Direct Purchase

DOI

10.2991/icmess-17.2017.116How to use a DOI?

Keywords

farmer-supermarket direct supply; agricultural supply chain; option pricing; binomial option pricing model

Abstract

To avoid the "farmers + supermarket" secondary agricultural supply system due to the risk brought by the market price fluctuations, introducing the option contracts and applying binomial option pricing model in the course of agricultural products pricing, building the pricing model of agricultural production cooperatives and supermarket under the condition of expected profit maximization. Finally, according to the numerical calculation, the rationality of the model was verified and decision-making advice was given. The results we obtained demonstrate that the optimal option order quantity was a strictly monotone decreasing function of the exercise price and the option price, and the agricultural production cooperatives should pay attention to the determination of the exercise price, exercise price was simultaneously correlated with the spot market price, the long-term preparation cost and the short-term production cost.

Copyright

© 2017, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Congcong Xin
AU  - Xiangfei Yang
AU  - Mengna Li
PY  - 2017/06
DA  - 2017/06
TI  - Study on Pricing Model of Agricultural Products based on Option Contracts in the Perspective of Farmer-Supermarket Direct Purchase
BT  - Proceedings of the 2017 International Conference on Management, Education and Social Science (ICMESS 2017)
PB  - Atlantis Press
SP  - 498
EP  - 502
SN  - 2352-5398
UR  - https://doi.org/10.2991/icmess-17.2017.116
DO  - 10.2991/icmess-17.2017.116
ID  - Xin2017/06
ER  -