Studies On Price Risk Management Of Shaanxi Apple Supply Chain

Apple industry is the biggest fruit industry in our country. Shaanxi as the apple highquality region, apple industry is one of the six pillar industries, is a focus of Shaanxideveloping industry. Apple industry of Shaanxi satisfy the needs of the people’s high qualityconsumption, improve orchard workers’ income, also promote the development of Shaanxieconomy. In the development process of Shaanxi apple industry, all sorts of problems alsogradually appear. In the apple supply chain, the apple price directly affects the cost and profitof the main body. The farmer’s field sales price differ from that of the sales price and themarket retail price. Shaanxi apple price fluctuations of the entire supply chain bring big risk toconsumers, supplies and the whole supply chain. To realize the healthy, stable and sustainabledevelopment of Shaanxi apple industry, we must explore the problems and price risk existingin the supply chain, to optimize the Shaanxi apple’s supply chain, reduce the price risk in theprocess of Shaanxi apple supply and sale.In this paper, through the introduction of the status, characteristics, the risks and issues ofShaanxi apple’s supply chain, states the causes of Shaanxi apple supply chain price risk and itsinfluence, further explore the method of Shaanxi apple supply chain price risk management:contract farming,"Farming-Supermarket" Docking, Shaanxi apple brand building,constructing the key link in the supply chain. This paper try to use the investment portfoliotheory in the research of reasonable resource configuration of Shaanxi apple in the nationalsupply. Through the empirical analysis to measure and control the supply price risk, explorethe feasibility and validity of portfolio theory in reducing the price risk of Shaanxi applesupply chain. Compare and analyze the empirical result of the mean-variance model and half–variance model. Study their advantages and disadvantages on the applicability of the riskmeasurement and control. Compare and analyze the empirical results of mean-variance modeland half-variance model. Study the advantages, disadvantages and applicability on the riskmeasurement and control. In evaluation of Shaanxi apple supply chain’s specific retail pricerisk, choose the retail price of Xi’an renrenle supermarket and renrenjia supermarket assample to measure the market price volatility risk and calculate the risk occurrence frequencyby VaR risk value method. Then analyze apple price risk and its characteristics in specificmarkets. We have the following conclusions through the above study:(1) The Shaanxi apple suppliers can reduce supply price risk,improve expected earnings,improve supply chain efficiency and stability by rational allocation of supply. Through themean-variance model or half-variance model to optimize the combination, can allsignificantly reduce the risk of apple sales price.The quantitative analysis method of portfoliotheory is feasible in measuring and avoiding the apple supply chain price risk, to providequantitative analysis ideas and effective method for supply chain price risk management.(2) Through the empirical analysis of mean-variance model and half-variance model, wefound advantages, disadvantages and applicability on the Shaanxi apple supply chain’s riskmeasurement and control: the mean-variance model can reduce variance value, improve thestability of the entire portfolio income, but decrease suppliers income; the assumption ofnormal distribution limits the broad applicability of model. But because the mean-variancemodel plan according to the minimal price fluctuation,it is favorable to the market andconsumers. Without normal distribution assumption, half-variance model have a wide rangeof application, it can disperse downward price risk, maximize the expected benefits so itcomply with the supplier in the mind. But, at the same time it has limitations, downward pricefluctuation is also market risk, it can bring market unhealthy factor, make supply chain notstable, jeopardize the consumer’s interests.(3)Through the empirical research of measuring and evaluating the risk of xi ’an two bigsupermarket apple price fluctuations which use the method of VaR risk value method, canmeasure the risk, risk direction and risk occurrence frequency of supermarket apple pricefluctuation the next month. VaR method in evaluating and measuring apple’s supply chainterminal retail market price risk is feasible and effective. Considering the probability ofdifferent degree risk, the measurement results of price risk using VaR method is moreaccurately. At the same time it will summarize all risk as a number, the contrast andmanagement of risk between different market is more convenient.