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Dynamic pricing and joint carbon reduction strategies at the production and consumption end in a dual-channel fuel vehicle supply chain

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  • Yi, Yongxi
  • Fu, Ao
  • Zhang, Sheng
  • Li, Yuqiong

Abstract

This paper investigates carbon reduction in a fuel automotive supply chain. It consists of a manufacturer responsible for carbon reduction and opening an online channel opportunely and a retailer who markets and sells the product through traditional offline channels. Consumers have a preference for low-carbon and low-fuel consumption. It first analyzes decentralized and centralized decision-making under dual channels as a benchmark for comparison. Then, compare the performance of single and dual channels under decentralized decision-making to explore the advantages and conditions of dual channels and link centralized decision-making to reveal the double marginal effect of the supply chain. Finally, it designs a marketing cost-sharing contract to coordinate the behavior of all parties in the supply chain. The results suggest that as long as consumer preference for online channels reaches a certain threshold, dual-channel operation leads to higher double-ended carbon reduction investment, lower prices, and higher total supply chain profits than single-channel, but instead decreases profits for the retailer. Besides, in contrast to decentralized decision-making, marketing cost-sharing contracts can improve profits for all parties in the supply chain, enhance carbon and fuel consumption reduction investment, and partially address the double-marginal effect of the supply chain.

Suggested Citation

  • Yi, Yongxi & Fu, Ao & Zhang, Sheng & Li, Yuqiong, 2024. "Dynamic pricing and joint carbon reduction strategies at the production and consumption end in a dual-channel fuel vehicle supply chain," Energy Economics, Elsevier, vol. 131(C).
    • Handle: RePEc:eee:eneeco:v:131:y:2024:i:c:s014098832400104x
    DOI: 10.1016/j.eneco.2024.107396
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    References listed on IDEAS

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