Optimal Decisions in a Multi-Party Closed-Loop Supply Chain Considering Green Marketing and Carbon Tax Policy

Abstract

Global warming and e-waste pollution are two major environmental pollution issues that have attracted widespread attention. The government has adopted various measures to reduce carbon emissions from businesses and to make manufacturers responsible for recycling e-waste. In the face of external pressures, more and more companies are implementing sustainable closed-loop supply chain (CLSC) management to reduce environmental pollution and achieve sustainable development. Therefore, it is essential to study the operational decisions of CLSC enterprises. This paper considers a sustainable CLSC consisting of two competing manufacturers and a dominant retailer. The government imposes a carbon tax on the retailer, and two manufacturers collect used products directly from their customers. We separately examine whether implementing green marketing by the retailer and the collaboration between the two manufacturers can improve their profits. By building decentralized CLSC mathematical models and applying game theory methods, we obtain that green marketing can increase profits for all CLSC members and improve return rates. The collaboration may yield higher total profits for two manufacturers than a decentralized solution, while the retailer’s profits may be lost under certain conditions. Finally, we perform several numerical analyses to find the relationship between unit carbon emission tax and social welfare and gain some managerial insights. The study gives key factors that CLSC companies should consider when making decisions to help them achieve sustainability and provides recommendations for the government to set a reasonable unit carbon tax.

Game Models for Ordering and Channel Decisions of New and Differentiated Remanufactured Products in a Closed-Loop Supply Chain with Sales Efforts

“…Shekarian [34] conducted a review and analysis of articles focusing on CLSC models grounded in GT, revealing that almost all pricing and coordination problems have been established using GT. In addition, Lyu et al [35] explored the cooperation problem among manufacturers by establishing a mathematical model of a decentralized closed-loop supply chain and applying game theory methods. Lee [36] established six different Stackelberg game models to identify the optimal choice for the market leadership in a CLSC.…”

Pricing and Coordinating the Lease-Oriented Closed-Loop Supply Chain for Construction Machinery in the Era of Carbon Tax

“…Currently, studies focused on closed-loop supply chains under carbon tax policies are relatively limited [41][42][43]. Previous research has primarily analyzed the impact of carbon tax rates and consumers' preferences on the profitability of closed-loop supply chains.…”

Boosting Sustainable Operations with Sustainable Supply Chain Modeling: A Case of Organizational Culture and Normative Commitment

“…Enterprises must continually adjust their operations [ 11 ] because they are facing increasingly intense environmental pressure and market competition [ 12 ]. Enterprises are also changing business models in order to adapt to the rapidly changing environment [ 13 , 14 ] and because of this it is important to constantly develop new models that improve sustainability in enterprises and their supply chains, including the logistics sector. It was also pointed out [ 15 ] that normative commitment (NC) improves all types of logistics and consequently supply chains, while it was also noted [ 16 ] that the role of organizational culture (OC) supports the vision of sustainability.…”