The study of trends in the structure of the Pig supply chain upstream view-based transaction costs

Abstract

The Pig supply chain make up of three nodes, piglet supplier, pig cultivation, and butchering &processing factory. The upstream is mean from piglet supplier to pig cultivation. There are two types structure in the upstream pig supply chain in mainland china. The first one is the distribution channel mode that there has a dealer between pig raiser and piglet supplier, also named traditional mode. The second one is direct selling mode that the supplier sell piglets to raiser directly, also named scaled cultivation mode. This paper analyzed transaction attribute of two modes from three aspect: Asset Specificity, Trading Frequency, Uncertainty in exchange. Then, build the transaction cost function with the transaction size as parameter, and compare the transaction cost between those two types upstream structure. The conclusion is that with the cultivation scale enlarges; the structure of upstream pig supply chain is changing from distribution channel mode to direct selling mode. In the end, use a numerical experiment to illustrate the conclusion.