Profit distribution mechanism of agricultural supply chain based on fair entropy

by Fuzhen Gu, Xun Yu

This paper constructs a profit distribution model under centralized decision-making by taking the secondary agricultural supply chain as an example. Moreover, it introduces resources and risk as two factors to form significant weights and then designs a fair profit distribution mechanism of the supply chain according to the weights. Finally, this paper solves the optimal solution of the profit distribution coefficient by using fair entropy. Research results find that the distribution according to the optimal profit distribution coefficient can maximize the profit of each actor and achieves the matching of returns and inputs. Therefore, this paper puts forward some suggestions that include establishing a precise distribution mechanism based on contracts or property rights definitions, considering the cost and importance weight of each actor’s input when formulating the profit distribution coefficient, and paying attention to information sharing.