Optimal Pricing, Ordering, and Coordination for Prefabricated Building Supply Chain with Power Structure and Flexible Cap-and-Trade

Abstract

Under the increasing pressure of global emission reduction, prefabricated buildings are becoming more and more popular. As prefabricated building manufacturers and assemblers are emerging in the market, how do they make decisions of pricing, ordering, and emission reduction? In this paper, game theory is used to make the decisions for the prefabricated building supply chain with flexible cap-and-trade and different power structures, i.e., using prefabricated building manufacturers as the leader, using the vertical Nash equilibrium, and using prefabricated building assemblers as the leader. The two-part tariff contract is designed to coordinate the supply chain and to improve the supply chain performance. Moreover, we discuss the influence of different power structures and the two-part tariff contract on the optimal decisions and profits. Finally, numerical analysis is used to verify the conclusions. This indicates that the supply chain leaders will gain a higher profit and that the power structure has a significant influence on the two-part tariff contract, which will result in an unfair distribution of profit. High carbon trading prices benefit carbon emission reduction. Consumer low-carbon awareness has a positive effect on carbon emission reduction and supply chain performance.

Optimal pricing and carbon emission reduction decisions for a prefabricated building closed-loop supply chain under a carbon cap-and-trade regulation and government subsidies

“…However, to obtain higher profits, the assembler is obliged to reasonably command the cost element. Based on game theory, Jiang et al [ 44 ] tested the two-stage prefabricated structure supply chain possessing power structures and agile cap-and-trade and explored the best strategies under tariff contracts and dissimilar power structures. Taking advantage of a Stackelberg model, Jiang and Yuan [ 45 ] considered the collaboration in the supply chain of prefabricated buildings under the cap-and-trade ordinance.…”

The Optimal Emission Reduction and Recycling Strategies in Construction Material Supply Chain under Carbon Cap–Trade Mechanism

“…Regarding other influencing factors, Refs. [18,19] suggested that consumer low-carbon awareness has a positive effect on CER and supply chain performance.…”

Green Cooperation Strategy of Prefabricated Building Supply Chain Based on Smart Construction Management Platform

“…Liu and Li studied the use of IoT in the PBSC for promotional purposes and found that market penetration of IoT platforms in the market of primary commodities and services is a key factor influencing the decisions of key stakeholders [11]. In terms of operational decisions, Jiang et al examined the optimal pricing and ordering decisions of PBSCs under different power structures and carbon trading policies, and analyzed the impact of two-part tariff contracts on the optimal decisions [19]. Zhai et al explored the time coordination problem of PBSCs and proposed reducing the handling cost by reducing the time uncertainty and congestion probability through a spatial-temporal approach [20].…”