Work

Risk and value chains: Participant sharing of risk and rewards

Year: 2004

Type: article

Abstract: Much discussion, analysis and experimentation with various forms of value chain coordination has occurred, but often, these business arrangements have not been sustainable. We address the important role that risk/reward sharing plays in developing sustainable value chains. The discussion will: 1) describe an analytical framework for determining the optimal risk/reward sharing between partners in a value chain, and 2) illustrate the application of the framework to contractual arrangements between producers and processors in the pork industry. We find that contract structures must balance the risk/reward preferences of both producers and processors in order to be sustainable.

Source: Journal on Chain and Network Science

DOI: 10.3920/jcns2004.x039

Authors: Paul V. Preckel, Allan Gray, Michael Boehlje, Sounghun Kim

Institution: Purdue University West Lafayette

Language: English

Topic: Supply Chain and Inventory Management

Subfield: Management Information Systems

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Funder: National Science Foundation

OpenAlex ID: W1972963141

FWCI: 1.231

Cites: 26

Cited by: 15

Related to: 10