Production and pricing problems in make-to-order supply chain with cap-and-trade regulation

Xu, Xiaoping; Zhang, Wei; He, Ping; Xu, Xiaoyan

doi:10.1016/j.omega.2015.08.006

Cited by 173 publications

(66 citation statements)

References 20 publications

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“…Sustainability 2020, 12, 0 4 of 24 Some literature also studied the production and pricing decisions of participants in the supply chain under environmental regulation [37,38]. Chen and Sheu [39] investigated a rational environmental regulation mechanism that could promote EPR for the participants in the green supply chain.…”

Section: Environmental Regulationmentioning

confidence: 99%

Joint Emission Reduction Strategy in Green Supply Chain under Environmental Regulation

2020

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Under the threat of global warming, joint emission reduction strategy has been widely adopted as an effective solution for the industry to guarantee environmental sustainability. In the practice of supply chain, environmental regulations and supply chain contracts are applied with the attempt to improve environmental performance. However, whether these measures are actually effective remains unanswered. In this paper, we study a supply chain with one manufacturer and one retailer adopting joint emission reduction strategy. We first investigate under what circumstance the environmental regulation can effectively result in higher emission reduction efforts. The result shows that when the cost coefficient satisfies certain conditions, the increase of penalty or subsidy can lead to more investment in emission reduction. In addition, if the environmental impact caused by the production process is extremely high, the enforcement of the regulation is ineffective. We also explore how the cost-revenue-sharing contract affects the emission reduction strategy and the coordination of the members in the supply chain. The results suggest that the incentive effect of environmental regulation is more effective when the supply chain coordination contract exists. Numerical experiments are also presented to verify our analytical conclusions.

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Section: Environmental Regulationmentioning

confidence: 99%

Joint Emission Reduction Strategy in Green Supply Chain under Environmental Regulation

2020

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“…Apart from production management, researchers also pay attention to pricing problems under carbon emission regulation. Xu et al [32] study how a manufacturer makes pricing decisions in a MTO model considering the carbon cap-andtrade mechanism. García-Alvarado et al [29] discuss enterprises' pricing strategy by solving a Markov decision problem under di erent emission regulations.…”

Section: Literature Reviewmentioning

confidence: 99%

Pricing Strategy and Carbon Emission Abatement under Cap-and-Trade Regulation Considering Social Learning

Chen

2019

Discrete Dynamics in Nature and Society

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In an uncertainty market, social learning plays a signi cant role in obtaining information to make better decisions. Under cap-and-trade regulation, this paper aims to investigate rms' pricing and carbon emission abatement issues considering the impact of social learning. is paper establishes a two-period model in a market consisting of a manufacturer and heterogeneous consumers. e manufacturer produces two alternatives (ordinary product and low-carbon product) and makes decisions on sales prices and carbon emission abatement levels. Consumers make decisions on whether and which product to buy. Consumers are not sure about their valuations of products and have the opportunity to discover their true valuation by social learning. e results show that the emission abatement level on ordinary product is a ected by the pricing strategy for both types of products. However, the emission abatement level on low-carbon product is only a ected by its own pricing strategy. It also shows that social learning lowers the emission abatement level on ordinary product, whereas it improves the emission abatement level on low-carbon product when charging a high price for low-carbon product. Moreover, the price of ordinary product in period 1 is no less than that in period 2. In contrast, the price of low-carbon product in period 2 is higher than that in period 1.Hindawi

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“…For example, Xu et al [17] explored the impacts of the carbon trading price on the two products' production and pricing decisions in a supply chain. Zheng et al [18] studied the impacts of cap-and-trade on optimal pricing and order quantities and carbon emissions with different transportation modes, and found that the retailers prefer a low-carbon transportation mode when the carbon trading price is high.…”

Section: Literature Reviewmentioning

confidence: 99%

“…(4) Following the study of Goyal and Netessine [29] and Xu et al [17], we assume that consumer demand for the product is Q = a − bp, where a(a > 0) represents the potential market size, b (b > 0) is the price sensitivity of consumer, and p(p > w > c + θ f 0 ) is the selling price, which is a decision-making variable for the retailer.…”

Section: Problem Statement and Assumptionmentioning

confidence: 99%

Joint Pricing and Product Carbon Footprint Decisions and Coordination of Supply Chain with Cap-and-Trade Regulation

2018

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Abstract:The implementation of cap-and-trade regulation worldwide is bound to have some effects on supply chain decision-making. This paper investigates optimal pricing and product carbon footprint decisions of the supply chain consisting of a manufacturer and a retailer under cap-and-trade regulation by applying optimization and game theory. By comparing the optimal results between the centralized and decentralized decision-making models, we find that the optimal product carbon footprint and selling price not only depend on the carbon trading price and carbon cap allocated by the government, but also relate to the initial carbon footprint of the product and the decision-making methods in the supply chain. It is found that there is also a "double marginalization" in the decentralized situation, thus we coordinate the supply chain using a two-part tariff contract. Specifically, only the manufacturer adjusts dynamically the wholesale price and fixed fee within the coordinating contract according to different initial carbon footprint and the range of the carbon cap reduction by the government. Finally, we obtain several interesting conclusions from the numerical examples and provide managerial insights and policy implications from the analytical results.

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Production and pricing problems in make-to-order supply chain with cap-and-trade regulation

Cited by 173 publications

References 20 publications

Joint Emission Reduction Strategy in Green Supply Chain under Environmental Regulation

Joint Emission Reduction Strategy in Green Supply Chain under Environmental Regulation

Pricing Strategy and Carbon Emission Abatement under Cap-and-Trade Regulation Considering Social Learning

Joint Pricing and Product Carbon Footprint Decisions and Coordination of Supply Chain with Cap-and-Trade Regulation

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