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Green Procurement Relationships Development under Carbon Emissions Regulations: A Bi-Level Programming Approach

Author

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  • Xiao-Ying Bao

    (College of Management Science, Chengdu University of Technology, Chengdu 610059, China)

  • Lei Zhang

    (College of Business Administration, Zhejiang University of Finance and Economics, Hangzhou 310018, China
    School of Economics and Management, Fuzhou University, Fuzhou 350116, China)

Abstract

A multi-period Stackelberg game is adopted to study a green procurement relationship between manufacturers and suppliers in a supply chain. The manufacturers are considered as leaders, while the suppliers are modelled as followers in this Stackelberg game. Accordingly, a mixed binary linear bi-level programming model is developed to elaborate the game in consideration of carbon tax scheme. The upper level (the leader) aims at selecting a proper number of suitable suppliers to provide heterogeneous raw materials at the lowest operational cost. The objective of the lower level (the follower) is to find optimal purchasing quantities of raw materials. In addition, two lemmas are introduced to transform the mixed linear bi-level programming model into a single level linear programming model. The numerical example illustrates that: (1) the manufacturer prefers to adopt the multiple sourcing strategy due to the flexibility; (2) keeping stable supplies and large order volumes could effectively reduce carbon emissions for the suppliers and make the supply chain greener.

Suggested Citation

  • Xiao-Ying Bao & Lei Zhang, 2018. "Green Procurement Relationships Development under Carbon Emissions Regulations: A Bi-Level Programming Approach," IJERPH, MDPI, vol. 15(10), pages 1-14, October.
    • Handle: RePEc:gam:jijerp:v:15:y:2018:i:10:p:2183-:d:173985
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    References listed on IDEAS

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