Optimal Strategies for Manufacturers with the Reference Effect under Carbon Emissions-Sensitive Random Demand

Zhang, Baojun; Qu, Shaojian; Li, Panpan; Huang, Ripeng

doi:10.1155/2018/2452406

Cited by 3 publications

(2 citation statements)

References 38 publications

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“…Jiang and Chen [29] and Zhang et al [30] derived the optimal production and carbon emissions for a newsvendor system with consideration of carbon emissions-sensitive random demand and CEP and discussed the impact of carbon emissions-sensitive demand on the manufacturer's operation strategies, total carbon emissions and maximum expected profit. Different from their researches, we assume that manufacturers can trade carbon credits under cap-and-trade, which could also impact manufacturers' decisions.…”

Section: Joint Pricing and Ordering Decisions In Extended Newsvendor mentioning

confidence: 99%

Optimal Joint Production and Emissions Reduction Strategies Considering Consumers’ Environmental Preferences: A Manufacturer’s Perspective

Wen

Zhao

et al. 2019

Sustainability

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Carbon cap-and-trade mechanism is a government-mandated, market-based scheme to reduce emissions, which has a significant effect on manufacturers' operation decisions. Based on the cap-and-trade mechanism, this paper studies the joint production and emission reduction problem of a manufacturer. The manufacturer faces emissions-sensitive demand impacted by consumers' environmental preferences (CEP). An extended newsvendor model is used to find the optimal production quantity and emissions reduction quantity. We explore the impacts of market price of carbon credits, emission reduction investment coefficient and CEP on the optimal strategies. Numerical examples are provided to illustrate the theoretical results and orthogonal experimental design technique was applied to find robust system parameters. It is concluded that among all parameters, emissions cap has the greater impact on the expected profit, which is followed by than the market price of carbon credits. This means that the government plays a major role in economic development. The total carbon emissions are mainly affected by the carbon trading price and the product's sale price, which indicates the carbon trading market and product market play a larger role in controlling environmental benefits. Several valuable managerial insights on helping governments and industries understand how market conditions change and make better long-term decisions are further concluded.Sustainability 2019, 11, 474 2 of 15 trading mechanism. Based on carbon trading mechanisms, governments control carbon emissions by allocating free carbon quotas (called emissions cap) to enterprises [4]. If a manufacturer emits more carbon than the emissions cap, it has to buy quotas to emit extra carbon; if a manufacturer emits less carbon than the emissions cap, it can sell surplus carbon credits to gain extra revenue [5]. In China, seven carbon trading centers placed in Beijing, Shanghai, Guangdong and four other cities have implemented a carbon emissions trading mechanism [6]. By December 2017, these trading centers have completed 0.47 billion tons of carbon credits transaction in total and the turnover was more than 0.014 billion USD. It shows that the carbon trading mechanism could affect manufacturers' profits [3,7,8].In recent decades, people have become more concerned about environmental issues and been willing to buy low-carbon products [9,10]. The AliResearch Institution, which is a non-profit agency in China, estimated that the total number of consumers that prefer low-carbon products increased by 14 times in the past four years and reached 65 million in 2015 [11]. Thus, affected by the consumers' environmental preferences (CEP), many manufacturers such as P&G and HP have motivations to invest in low-carbon technologies to reduce carbon emissions [12]. Then CEP may affect manufacturer's profit and total carbon missions. As decision makers, under the cap-an-trade mechanism, all manufacturers need to re-determine their operational decisions, that is, the optimal production quantity a...

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Section: Joint Pricing and Ordering Decisions In Extended Newsvendor mentioning

confidence: 99%

Optimal Joint Production and Emissions Reduction Strategies Considering Consumers’ Environmental Preferences: A Manufacturer’s Perspective

Wen

Zhao

et al. 2019

Sustainability

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“…In summary, different from [22], we focus on low-carbon strategy. Different from [23] and [24], we discuss a decentralized decision, which includes Stackelberg game and Nash game. Different from [25] concerning the make-to-order mode, we demonstrate the make-to-stock mode.…”

Section: Introductionmentioning

confidence: 99%

Game theoretic model for low carbon supply chain under carbon emissions reduction sensitive random demand

Huang²,

2022

Applied Mathematics and Nonlinear Sciences

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This paper considers a low carbon supply chain consisting of a single manufacturer and a single retailer under the condition that the demand is uncertain. We first establish three games, including manufacturer Stackelberg (MS), retailer Stackelberg (RS) and Nash according to the different power structure of the firms. We then determine that the equilibrium stocking factors, emission reduction levels, wholesale prices and retail prices for the three models, respectively. After that, we demonstrate the effects of power structure. Results show that when the power shifts from the retailer to the manufacturer, the stocking factor decreases, whereas the wholesale price increases. Finally, we discuss the impacts of the random demand. We find that the expected profits of the firms, the emission reduction levels and the retail prices are increasing with respect to the market potential and low-carbon sensitivity coefficient, respectively. Meanwhile, they decrease with respect to the price sensitivity coefficient.

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A study on supply chain optimization with uncertain demand under the cap-and-trade system

Zhang

2023

Environ Dev Sustain

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Optimal Strategies for Manufacturers with the Reference Effect under Carbon Emissions-Sensitive Random Demand

Cited by 3 publications

References 38 publications

Optimal Joint Production and Emissions Reduction Strategies Considering Consumers’ Environmental Preferences: A Manufacturer’s Perspective

Optimal Joint Production and Emissions Reduction Strategies Considering Consumers’ Environmental Preferences: A Manufacturer’s Perspective

Game theoretic model for low carbon supply chain under carbon emissions reduction sensitive random demand

A study on supply chain optimization with uncertain demand under the cap-and-trade system

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