Optimal sustainability investment and pricing decisions in a two-echelon supply chain with emissions-sensitive demand under cap-and-trade policy

OPSEARCH ◽  
2022 ◽  
Author(s):  
Bibhas C. Giri ◽  
Ishani Ray
Keyword(s):  
Supply Chain ◽  
Trade Policy ◽  
Cap And Trade ◽  
Pricing Decisions

scholarly journals Achieve a low carbon supply chain through product mix

2017 ◽  
Vol 117 (10) ◽  
pp. 2468-2484 ◽  
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.

Analytics of cap-and-trade policy for dual supply chain network structures

2020 ◽  
Vol 22 (10) ◽  
pp. 1999-2021
Author(s):  
Umangi Pathak ◽  
Ravi Kant ◽  
Ravi Shankar
Keyword(s):  
Supply Chain ◽  
Trade Policy ◽  
Network Structures ◽  
Supply Chain Network ◽  
Cap And Trade

scholarly journals Profit Distribution Model for Construction Supply Chain with Cap-and-Trade Policy

2019 ◽  
Vol 11 (4) ◽  
pp. 1215 ◽  
Author(s):  
Wen Jiang ◽  
Wenfei Lu ◽  
Qianwen Xu
Keyword(s):  
Supply Chain ◽  
Trade Policy ◽  
Emission Reduction ◽  
Carbon Emission ◽  
Cap And Trade ◽  
Carbon Emission Reduction ◽  
Profit Distribution ◽  
General Contractor ◽  
Cost Coefficient ◽  
Pure Competition

Cap-and-trade has become one of the most widely used carbon emission limitation methods in the world. Its constraints have a great impact on the carbon emission reduction decisions and production operations of supply chain enterprises, as well as profit distribution. In the construction supply chain, there are few studies on the profit distribution and emission reduction decisions considering cap-and-trade policy. This paper investigates the profit distribution model of a two-echelon construction supply chain consisting of a general contractor and a subcontractor with cap-and-trade policy. Using game theory and Shapley value method, the optimal emission reduction decisions and profit distribution under three cooperation modes of pure competition, co-opetition, and pure cooperation are obtained, respectively. The research shows that the profits of the construction supply chain are increasing in pure competition, co-opetition, and pure cooperation scenarios, and the emission reduction amount of the construction supply chain in the case of pure cooperation is greater than that of pure competition and co-opetition. The carbon emission reduction amount under the co-opetition scenario is not always greater than that under the pure competition scenario, which depends on the emission reduction cost coefficient relationship of general contractor and subcontractor. When the cost coefficient of emission reduction of the general contractor is less than that of the subcontractor, the emission reduction amount under pure competition is larger than that under co-opetition. A numerical study is carried out to verify the conclusions and illustrated the profits of the supply chain decreased with the increase of carbon emission reduction cost coefficient, and had nothing to do with the emission reduction efficiency of enterprises.

Production-inventory and emission reduction investment decision under carbon cap-and-trade policy

2018 ◽  
Vol 52 (4-5) ◽  
pp. 1043-1067 ◽  
Author(s):  
Yuyao Fan ◽  
Min Wang ◽  
Lindu Zhao
Keyword(s):  
Supply Chain ◽  
Trade Policy ◽  
Carbon Emissions ◽  
Emission Reduction ◽  
Total Carbon ◽  
Compensation Mechanism ◽  
Cap And Trade ◽  
Emission Permits ◽  
Emission Permit ◽  
Production Inventory

The increasing amount of carbon emissions has caused global warming and challenged the sustainable development of environment. Governments around the world have implemented carbon policies including carbon cap-and-trade policy. In this paper, we focus on how a two-echelon supply chain manages its carbon footprints in production and inventory under carbon cap-and-trade policy. We extend the classical EOQ (economic order quantity) model and study decisions on production-inventory, carbon trading and emission reduction investment in the decentralized and centralized situations. The results show that emission permit sharing can effectively reduce the total cost and total carbon emissions of the supply chain. Moreover, the manufacturer’s emission reduction effort rises with the increase of the buying and selling prices of emission permits under centralized decision-making. In addition, a compensation mechanism is proposed for the centralized supply chain with emission permit sharing. It is observed that the buying and selling prices of emission permits have a positive influence on the permit sharing price in the compensation mechanism. Meanwhile, the retailer pays less for using the emission permits if it has a higher carbon cap, while the manufacturer with a higher carbon cap is more capable to provide a high compensation for the retailer.

scholarly journals Pricing decisions in a socially responsible supply chain under carbon cap-and-trade regulation

2019 ◽  
Vol 52 (13) ◽  
pp. 331-336
Author(s):  
Zhi-chao Zhang ◽  
Kevin W. Li ◽  
Zhi Liu ◽  
Jun Huang
Keyword(s):  
Supply Chain ◽  
Cap And Trade ◽  
Socially Responsible ◽  
Trade Regulation ◽  
Pricing Decisions
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