IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v12y2024i10p1564-d1396644.html
   My bibliography  Save this article

Using Game Theory to Explore the Multinational Supply Chain Production Inventory Models of Various Carbon Emission Policy Combinations

Author

Listed:
  • Jialiang Pan

    (School of Business and Management, Jiaxing Nanhu University, Jiaxing 314001, China)

  • Kun-Shan Wu

    (Department of Business Administration, Tamkang University, New Taipei City 251301, Taiwan)

  • Chih-Te Yang

    (Department of Business Administration, Tamkang University, New Taipei City 251301, Taiwan)

  • Chi-Jie Lu

    (Graduate Institute of Business Administration, Fu Jen Catholic University, New Taipei City 24205, Taiwan)

  • Shin Lu

    (Department of Biomedical Imaging and Radiological Sciences, National Yang Ming Chiao Tung University, Taipei 11221, Taiwan)

Abstract

This study uses Stackelberg game theory, considering different combinations of carbon emission reduction policies and that high-carbon-emission enterprises may face various carbon emission reduction regulations, to explore the production inventory problems in a multinational supply chain system. The purpose is to determine the manufacturer’s optimal production, shipping, carbon reduction investment, and the retailer’s replenishment under the equilibrium for different carbon emission policy combinations. To develop the production inventory models, this study first develops the total profit and carbon emission functions of the supply chain members, respectively, and then obtains the optimal solutions and total profits of the manufacturer and the retailer under different carbon emission policy combinations through the mathematical analysis method. Further, this study used several numerical examples to solve and compare the proposed models. The results of numerical analysis show that regardless of the increase in carbon price or carbon tax, the manufacturer and retailer will adjust their decisions to reduce carbon emissions. Specifically, an increase in the carbon price contributes to an increase in the total profit of manufacturers, while an increase in the carbon tax reduces the total profit of manufacturers. This study also explores a sensitivity analysis on the main parameters and has yielded meaningful management insights. For instance, in cases where low-carbonization strategies are required, the manufacturer or retailer can effectively reduce the carbon emissions resulting from production or purchasing activities, thereby significantly reducing overall carbon emissions. It is believed that the results of this study can provide enterprises/supply chains with reference to their respective production, transportation, carbon reduction investment, and inventory decisions under carbon emission policies, as well as information on partner selection and how to adjust decisions under environmental changes.

Suggested Citation

  • Jialiang Pan & Kun-Shan Wu & Chih-Te Yang & Chi-Jie Lu & Shin Lu, 2024. "Using Game Theory to Explore the Multinational Supply Chain Production Inventory Models of Various Carbon Emission Policy Combinations," Mathematics, MDPI, vol. 12(10), pages 1-18, May.
    • Handle: RePEc:gam:jmathe:v:12:y:2024:i:10:p:1564-:d:1396644
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/12/10/1564/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/12/10/1564/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Liang Shen & Fei Lin & T. C. E. Cheng, 2022. "Low-Carbon Transition Models of High Carbon Supply Chains under the Mixed Carbon Cap-and-Trade and Carbon Tax Policy in the Carbon Neutrality Era," IJERPH, MDPI, vol. 19(18), pages 1-21, September.
    2. Hovelaque, Vincent & Bironneau, Laurent, 2015. "The carbon-constrained EOQ model with carbon emission dependent demand," International Journal of Production Economics, Elsevier, vol. 164(C), pages 285-291.
    3. Hua, Guowei & Cheng, T.C.E. & Wang, Shouyang, 2011. "Managing carbon footprints in inventory management," International Journal of Production Economics, Elsevier, vol. 132(2), pages 178-185, August.
    4. Battini, Daria & Persona, Alessandro & Sgarbossa, Fabio, 2014. "A sustainable EOQ model: Theoretical formulation and applications," International Journal of Production Economics, Elsevier, vol. 149(C), pages 145-153.
    5. Zhang, Bin & Xu, Liang, 2013. "Multi-item production planning with carbon cap and trade mechanism," International Journal of Production Economics, Elsevier, vol. 144(1), pages 118-127.
    6. Zied Jemai & Y Bouchery & Asma Ghaffari & Yves Dallery, 2012. "Including sustainability criteria into inventory models," Post-Print hal-01672398, HAL.
    7. Mukunda Choudhury & Sujit Kumar De & Gour Chandra Mahata, 2023. "A pollution-sensitive multistage production-inventory model for deteriorating items considering expiration date under Stackelberg game approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 11847-11884, October.
    8. Dye, Chung-Yuan & Yang, Chih-Te, 2015. "Sustainable trade credit and replenishment decisions with credit-linked demand under carbon emission constraints," European Journal of Operational Research, Elsevier, vol. 244(1), pages 187-200.
    9. Asim Paul & Magfura Pervin & Sankar Kumar Roy & Nelson Maculan & Gerhard-Wilhelm Weber, 2022. "A green inventory model with the effect of carbon taxation," Annals of Operations Research, Springer, vol. 309(1), pages 233-248, February.
    10. Bouchery, Yann & Ghaffari, Asma & Jemai, Zied & Dallery, Yves, 2012. "Including sustainability criteria into inventory models," European Journal of Operational Research, Elsevier, vol. 222(2), pages 229-240.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhimiao Tao & Jiuping Xu, 2019. "Carbon-Regulated EOQ Models with Consumers’ Low-Carbon Awareness," Sustainability, MDPI, vol. 11(4), pages 1-16, February.
    2. Tapan Kumar Datta & Prasanta Nath & Karabi Dutta Choudhury, 2020. "A hybrid carbon policy inventory model with emission source-based green investments," OPSEARCH, Springer;Operational Research Society of India, vol. 57(1), pages 202-220, March.
    3. Palanivel Muthusamy & Venkadesh Murugesan & Vetriselvi Selvaraj, 2024. "Optimal production–inventory decision with shortage for deterioration item and effect of carbon emission policy combination with green technology," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(9), pages 23701-23766, September.
    4. YuJan Shen & KuanFu Shen & ChihTe Yang, 2019. "A Production Inventory Model for Deteriorating Items with Collaborative Preservation Technology Investment Under Carbon Tax," Sustainability, MDPI, vol. 11(18), pages 1-18, September.
    5. Mukunda Choudhury & Sujit Kumar De & Gour Chandra Mahata, 2023. "A pollution-sensitive multistage production-inventory model for deteriorating items considering expiration date under Stackelberg game approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 11847-11884, October.
    6. Konur, Dinçer & Campbell, James F. & Monfared, Sepideh A., 2017. "Economic and environmental considerations in a stochastic inventory control model with order splitting under different delivery schedules among suppliers," Omega, Elsevier, vol. 71(C), pages 46-65.
    7. Vahid Reza Soleymanfar & Ahmad Makui & Ata Allah Taleizadeh & Reza Tavakkoli-Moghaddam, 2022. "Sustainable EOQ and EPQ models for a two-echelon multi-product supply chain with return policy," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(4), pages 5317-5343, April.
    8. Ata Allah Taleizadeh & Leila Aliabadi & Park Thaichon, 2022. "A sustainable inventory system with price-sensitive demand and carbon emissions under partial trade credit and partial backordering," Operational Research, Springer, vol. 22(4), pages 4471-4516, September.
    9. Schaefer, Brian & Konur, Dinçer, 2015. "Economic and environmental considerations in a continuous review inventory control system with integrated transportation decisions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 80(C), pages 142-165.
    10. Hong, Zhaofu & Dai, Wei & Luh, Hsing & Yang, Chenchen, 2018. "Optimal configuration of a green product supply chain with guaranteed service time and emission constraints," European Journal of Operational Research, Elsevier, vol. 266(2), pages 663-677.
    11. Andriolo, Alessandro & Battini, Daria & Persona, Alessandro & Sgarbossa, Fabio, 2015. "Haulage sharing approach to achieve sustainability in material purchasing: New method and numerical applications," International Journal of Production Economics, Elsevier, vol. 164(C), pages 308-318.
    12. García-Alvarado, M.S. & Paquet, M. & Chaabane, A., 2015. "On inventory control of product recovery systems subject to environmental mechanisms," International Journal of Production Economics, Elsevier, vol. 165(C), pages 132-144.
    13. Xu, Song & Govindan, Kannan & Wang, Wanru & Yang, Wenting, 2024. "Supply chain management under cap-and-trade regulation: A literature review and research opportunities," International Journal of Production Economics, Elsevier, vol. 271(C).
    14. Andriolo, Alessandro & Battini, Daria & Grubbström, Robert W. & Persona, Alessandro & Sgarbossa, Fabio, 2014. "A century of evolution from Harris׳s basic lot size model: Survey and research agenda," International Journal of Production Economics, Elsevier, vol. 155(C), pages 16-38.
    15. Hovelaque, Vincent & Bironneau, Laurent, 2015. "The carbon-constrained EOQ model with carbon emission dependent demand," International Journal of Production Economics, Elsevier, vol. 164(C), pages 285-291.
    16. Suchitra Pattnaik & Mitali Madhusmita Nayak & Stefano Abbate & Piera Centobelli, 2021. "Recent Trends in Sustainable Inventory Models: A Literature Review," Sustainability, MDPI, vol. 13(21), pages 1-20, October.
    17. Dye, Chung-Yuan & Yang, Chih-Te, 2015. "Sustainable trade credit and replenishment decisions with credit-linked demand under carbon emission constraints," European Journal of Operational Research, Elsevier, vol. 244(1), pages 187-200.
    18. Y Bouchery & Asma Ghaffari & Zied Jemai & Jan C Fransoo, 2016. "Sustainable transportation and order quantity: insights from multiobjective optimization," Post-Print hal-01954465, HAL.
    19. Daiki Min & Kwanghun Chung, 2017. "A Joint Optimal Decision on Shipment Size and Carbon Reduction under Direct Shipment and Peddling Distribution Strategies," Sustainability, MDPI, vol. 9(11), pages 1-21, November.
    20. K. M. Kamna & Priyamvada & Jitendra Singh & Chandra K. Jaggi, 2024. "A green strategic approach towards a smart production system with promotional and environment sensitive demand," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 15(8), pages 3672-3687, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jmathe:v:12:y:2024:i:10:p:1564-:d:1396644. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.