Energy-saving and pricing decisions in a sustainable supply chain considering behavioral concerns

Abstract

With the rising environmental concerns among consumers all over the world, sustainability has received considerable attention, and numerous enterprises are adopting various practices such as investing in energy-saving to improve sustainability in supply chains. However, many previous researches always assume that decision makers are perfectly rational and neglect the behavioral concerns of decision makers. This paper considers a two-stage sustainable supply chain with behavioral concerns in order to develop more realistic models, and mainly focuses on the energy-saving and pricing decisions in the decentralized system, as well as how to improve energy-saving level and profits. We develop decentralized decision-making models under two types of behavioral concerns: fairness concern and risk aversion, and derive the optimal strategy for each member with a Stackelberg game in which the manufacturer acts as the leader. The effect of the behavioral concerns on the optimal decisions and corresponding profits is discussed in detail. Theoretical analysis verified by numerical experiments shows that the fairness behavior always causes a negative effect on the manufacturer, total supply chain, and energy conservation, while it could benefit the retailer in profits. The risk aversion behavior always benefits the manufacturer, total supply chain, and energy conservation, whereas it could make the retailer suffer. Note that both the optimal energy-saving level and corresponding profit of the total supply chain under two types of behavioral concerns are lower than that in the centralized system, thereby we propose a revenue-cost-sharing contract to coordinate the supply chain, under which both the manufacturer and the retailer can achieve a win-win outcome and the energy-saving level can be improved. In addition, some managerial implications through our analytical and numerical results are summarized in this paper.

Renewable Power Generation: A Supply Chain Perspective

“…Some advanced technologies are relevant to the renewable energy sector for power generation to achieve optimal efficiency in the renewable energy supply chain, notably the Hybrid Renewable Energy System (HRES) and the "Power To X" concepts. HRES refers to the combination of two or more renewable energy sources, operating in stand-alone or grid-connected mode [106]. The stand-alone mode is characterized by a decentralized production and large storage capacity.…”

“…Overall, the hybrid renewable energy system can successfully address some of the barriers in terms of flexibility, efficiency, reliability, emissions, and fuel economy [108,109]. To decide the ideal combination, it is important to consider the local availability of resources at a given site, the efficiency of energy conversion, and the land requirements [106]. On the other hand, the "power to X" system allows for a multi-stage production process based on the transformation of power into "X", where X denotes various forms of energy such as heat, hydrogen, gas, liquid, methane, ammonia, etc.…”

Sustainable Decision-Making in a Low-Carbon Supply Chain: Fairness Preferences and Green Investment

“…Yang et al showed that when retailers have fairness preferences, cooperative advertising strategies can be used to achieve supply chain coordination under certain conditions [30]. Chen et al developed decentralized decision-making models under two types of behavioural concerns-fairness concerns and risk aversionand derived the optimal strategy for each member with a Stackelberg game in which the manufacturer acts as the leader [31]. Guan et al studied manufacturers and retailers with Nash bargaining fairness concerns and used revenue and cost-sharing contracts to achieve supply chain coordination [32].…”

Coordinating a closed-loop green supply chain for remanufactured product under competition

“…As the greening level expands, it turns out to be progressively expensive. The greening level investment cost is considered as a quadratic function given by λθ 2 (Ghosh and Shah [27], Chen et al [47]). This quadratic function not just captures the phenomenon of expanding marginal expense, yet additionally mirrors the fact that the investment cost of the underlying greening level per unit is diminishing.…”