Analyzing a manufacturer-retailer sustainable supply chain under cap-and-trade policy and revenue sharing contract

We explore coordination issues of a two-echelon supply chain, consisting of a distributor and a retailer. The effect of revenue-sharing contract mechanism is examined under stock-time-price-sensitive demand rate. First, we investigate relationships between distributor and retailer under noncooperative distributor-Stackelberg games. Then we establish analytically that revenue sharing contact is able to coordinate the system and leads to the win-win outcomes. Finally, numerical examples are presented to compare results between the different models.

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Revenue Sharing Contract of Green Supply Chain under Manufacturer Risk-Aversion

Applied Mechanics and Materials ◽

10.4028/www.scientific.net/amm.697.482 ◽

2014 ◽

Vol 697 ◽

pp. 482-487

Author(s):

Shi Ying Jiang ◽

Chun Yan Ma

Keyword(s):

Decision Making ◽

Supply Chain ◽

Risk Aversion ◽

Stackelberg Game ◽

Wholesale Price ◽

Revenue Sharing ◽

Green Supply Chain ◽

Game Model ◽

Product Price ◽

Revenue Sharing Contract

Background on two stages green supply chain consisting of a manufacturer and a retailer, considering the degree of risk aversion and product greenness, consumer preferences and other factors, the centralized decision-making game model and manufacturer-leading Stackelberg game model are established.Then two game models are compared. The interaction of product greenness, wholesale price, product price,and risk aversion utility for manufacturers and retailers are also disscussed. Finally, the revenue sharing contract is applied to coordinate the green supply chain . The results show that:(1) In the centralized decision-making model, there is a critical value of the product green degree; (2)In manufacturer-leading Stackelberg game model, the higher the green degree of the product, the higher the manufacturer's wholesale price,and the wholesale price increases as risk aversion degree of manufacturers improves;(3)The revenue sharing contract can coordinate this type of green supply chain under manufacturers risk-averse.

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Achieve a low carbon supply chain through product mix

Industrial Management & Data Systems ◽

10.1108/imds-02-2017-0054 ◽

2017 ◽

Vol 117 (10) ◽

pp. 2468-2484 ◽

Cited By ~ 7

Author(s):

Xu Chen ◽

Xiaojun Wang

Keyword(s):

Supply Chain ◽

Trade Policy ◽

Carbon Emissions ◽

Channel Structure ◽

Low Carbon ◽

Cap And Trade ◽

Product Mix ◽

Content Type ◽

Carbon Supply ◽

Trade Offs

Purpose In the era of climate change, industrial organizations are under increasing pressure from consumers and regulators to reduce greenhouse gas emissions. The purpose of this paper is to examine the effectiveness of product mix as a strategy to deliver the low carbon supply chain under the cap-and-trade policy. Design/methodology/approach The authors incorporate the cap-and-trade policy into the green product mix decision models by using game-theoretic approach and compare these decisions in a decentralized model and a centralized model, respectively. The research explores potential behavioral changes under the cap-and-trade in the context of a two-echelon supply chain. Findings The analysis results show that the channel structure has significant impact on both economic and environmental performances. An integrated supply chain generates more profits. In contrast, a decentralized supply chain has lower carbon emissions. The cap-and-trade policy makes a different impact on the economic and environmental performances of the supply chain. Balancing the trade-offs is critical to ensure the long-term sustainability. Originality/value The research offers many interesting observations with respect to the effect of product mix strategy on operational decisions and the trade-offs between costs and carbon emissions under the cap-and-trade policy. The insights derived from the analysis not only help firms to make important operational and strategic decisions to reduce carbon emissions while maintaining their economic competitiveness, but also make meaningful contribution to governments’ policy making for carbon emissions control.

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