IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i8p2209-d222271.html
   My bibliography  Save this article

A Green Supply-Chain Decision Model for Energy-Saving Products That Accounts for Government Subsidies

Author

Listed:
  • Jian Xue

    (School of Economics and Management, Shaanxi University of Science and Technology, Xi’an 710021, China)

  • Ruifeng Gong

    (School of Economics and Management, Shaanxi University of Science and Technology, Xi’an 710021, China
    Business School, Hunan University of Humanities, Science and Technology, Loudi, Hunan 417000, China)

  • Laijun Zhao

    (Sino-US Global Logistics Institute, Shanghai Jiao Tong University,1954 Huashan Rd., Shanghai 200030, China
    Antai College of Economics and Management, Shanghai Jiao Tong University, 1954 Huashan Rd., Shanghai 200030, China)

  • Xiaoqing Ji

    (School of Economics and Management, Shaanxi University of Science and Technology, Xi’an 710021, China)

  • Yan Xu

    (School of Economics and Management, Shaanxi University of Science and Technology, Xi’an 710021, China)

Abstract

Government subsidies are a common policy adopted to promote energy conservation and emission reduction. The decision-making that occurs within the green supply chain for energy-saving products under government subsidies is an area of great academic interest and game theory is becoming a popular tool in such research. In this paper, we examined centralized and decentralized decision-making models for the green supply chain and a coordinated decision-making model for revenue-sharing contracts based on game theory. We studied the effects of government subsidies on retail prices, energy conservation levels, market demand, supply chain profits, and social welfare for energy-saving products. We then compared the effectiveness of the three models using a numerical example. Our results revealed the range of contract parameters for which manufacturer and retailer profits increase. Our results show that government subsidies can significantly improve social welfare and promote the improvement of energy-saving products. Centralized decision-making generates higher profits than decentralized decisions and government subsidies were positively correlated with the level of energy conservation, product prices, and market demand. Revenue sharing contract coordination decisions can coordinate the supply chain and achieve the same effect as centralized decisions.

Suggested Citation

  • Jian Xue & Ruifeng Gong & Laijun Zhao & Xiaoqing Ji & Yan Xu, 2019. "A Green Supply-Chain Decision Model for Energy-Saving Products That Accounts for Government Subsidies," Sustainability, MDPI, vol. 11(8), pages 1-17, April.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:8:p:2209-:d:222271
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/8/2209/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/11/8/2209/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ghosh, Debabrata & Shah, Janat, 2012. "A comparative analysis of greening policies across supply chain structures," International Journal of Production Economics, Elsevier, vol. 135(2), pages 568-583.
    2. Liu, Zugang (Leo) & Anderson, Trisha D. & Cruz, Jose M., 2012. "Consumer environmental awareness and competition in two-stage supply chains," European Journal of Operational Research, Elsevier, vol. 218(3), pages 602-613.
    3. Fogarty, James J. & Sagerer, Simon, 2016. "Exploration externalities and government subsidies: The return to government," Resources Policy, Elsevier, vol. 47(C), pages 78-86.
    4. Gongbing Bi & Minyue Jin & Liuyi Ling & Feng Yang, 2017. "Environmental subsidy and the choice of green technology in the presence of green consumers," Annals of Operations Research, Springer, vol. 255(1), pages 547-568, August.
    5. Chen, Zhisong & Ivan Su, Shong-Iee, 2019. "Social welfare maximization with the least subsidy: Photovoltaic supply chain equilibrium and coordination with fairness concern," Renewable Energy, Elsevier, vol. 132(C), pages 1332-1347.
    6. Heydari, Jafar & Govindan, Kannan & Sadeghi, Razieh, 2018. "Reverse supply chain coordination under stochastic remanufacturing capacity," International Journal of Production Economics, Elsevier, vol. 202(C), pages 1-11.
    7. Wenfang Shang & Lei Yang, 2015. "Contract negotiation and risk preferences in dual-channel supply chain coordination," International Journal of Production Research, Taylor & Francis Journals, vol. 53(16), pages 4837-4856, August.
    8. Qiang Han & Yuyan Wang, 2018. "Decision and Coordination in a Low-Carbon E-Supply Chain Considering the Manufacturer’s Carbon Emission Reduction Behavior," Sustainability, MDPI, vol. 10(5), pages 1-23, May.
    9. Mitra, Supriya & Webster, Scott, 2008. "Competition in remanufacturing and the effects of government subsidies," International Journal of Production Economics, Elsevier, vol. 111(2), pages 287-298, February.
    10. Lu, Zhijian & Shao, Shuai, 2016. "Impacts of government subsidies on pricing and performance level choice in Energy Performance Contracting: A two-step optimal decision model," Applied Energy, Elsevier, vol. 184(C), pages 1176-1183.
    11. Yao, Dong-Qing & Liu, John J., 2005. "Competitive pricing of mixed retail and e-tail distribution channels," Omega, Elsevier, vol. 33(3), pages 235-247, June.
    12. Jian Huang & Mingming Leng & Liping Liang & Jian Liu, 2013. "Promoting electric automobiles: supply chain analysis under a government’s subsidy incentive scheme," IISE Transactions, Taylor & Francis Journals, vol. 45(8), pages 826-844.
    13. Luo, Chunlin & Leng, Mingming & Huang, Jian & Liang, Liping, 2014. "Supply chain analysis under a price-discount incentive scheme for electric vehicles," European Journal of Operational Research, Elsevier, vol. 235(1), pages 329-333.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Weimin Ma & Ranran Zhang & Shiwei Chai, 2019. "What Drives Green Innovation? A Game Theoretic Analysis of Government Subsidy and Cooperation Contract," Sustainability, MDPI, vol. 11(20), pages 1-24, October.
    2. Ruifeng Gong & Jian Xue & Laijun Zhao & Oleksandra Zolotova & Xiaoqing Ji & Yan Xu, 2019. "A Bibliometric Analysis of Green Supply Chain Management Based on the Web of Science (WOS) Platform," Sustainability, MDPI, vol. 11(12), pages 1-18, June.
    3. Shan Chang & Bin Hu & Xiuhong He, 2019. "Supply Chain Coordination in the Context of Green Marketing Efforts and Capacity Expansion," Sustainability, MDPI, vol. 11(20), pages 1-22, October.
    4. Yaoguang Zhong & Ivan Ka Wai Lai & Fangfang Guo & Huajun Tang, 2021. "Research on Government Subsidy Strategies for the Development of Agricultural Products E-Commerce," Agriculture, MDPI, vol. 11(11), pages 1-27, November.
    5. Fangfang Guo & Tao Zhang & Xiuquan Huang & Yaoguang Zhong, 2023. "Government Subsidy Strategies Considering Greenness on Agricultural Product E-Commerce Supply Chain," Mathematics, MDPI, vol. 11(7), pages 1-26, March.
    6. Han, Xiaoya & Khouja, Moutaz & Liu, Xin, 2023. "A dynamic model considering consumer green awareness and environmental subsidy," International Journal of Production Economics, Elsevier, vol. 260(C).
    7. Wensi Zhang & Jing Xiao & Lingfei Cai, 2020. "Joint Emission Reduction Strategy in Green Supply Chain under Environmental Regulation," Sustainability, MDPI, vol. 12(8), pages 1-24, April.
    8. Yanhong Yuan & Yaru Zhang & Lei Wang & Li Wang, 2022. "Coping Decisions of Production Enterprises under Low-Carbon Economy," Sustainability, MDPI, vol. 14(15), pages 1-21, August.
    9. Lihua Jiang & Wei Chen & Shichang Lu & Zhaoxiang Chen, 2022. "Regulatory Effect on Information Sharing of Industrial Internet Platforms Based on Three Differentiated Game Scenarios," Sustainability, MDPI, vol. 15(1), pages 1-25, December.
    10. Fuan Zhang & Na Li, 2022. "The Impact of CSR on the Performance of a Dual-Channel Closed-Loop Supply Chain under Two Carbon Regulatory Policies," Sustainability, MDPI, vol. 14(5), pages 1-22, March.
    11. Cong Wang & Zongbao Zou & Shidao Geng, 2021. "Green Technology Investment in a Decentralized Supply Chain under Demand Uncertainty," Sustainability, MDPI, vol. 13(7), pages 1-25, March.
    12. Changhong Li & Jialuo Wang & Jiao Zheng & Jiani Gao, 2022. "Effects of Carbon Policy on Carbon Emission Reduction in Supply Chain under Uncertain Demand," Sustainability, MDPI, vol. 14(9), pages 1-20, May.
    13. Ke Li & Gengxin Dai & Yanfei Xia & Zongyu Mu & Guitao Zhang & Yangyan Shi, 2022. "Green Technology Investment with Data-Driven Marketing and Government Subsidy in a Platform Supply Chain," Sustainability, MDPI, vol. 14(7), pages 1-22, March.
    14. Zhe Huang & Min Fu, 2020. "Research on green decision making of pharmaceutical logistics considering government subsidy strategy," PLOS ONE, Public Library of Science, vol. 15(10), pages 1-13, October.
    15. Gorji, Mohammad-Ali & Shetab-Boushehri, Seyyed-Nader & Akbarzadeh, Meisam, 2022. "Developing public transportation resilience against the epidemic through government tax policies: A game-theoretic approach," Transport Policy, Elsevier, vol. 128(C), pages 229-239.
    16. Haiyan Shan & Chen Zhang & Guo Wei, 2020. "Bundling or Unbundling? Pricing Strategy for Complementary Products in a Green Supply Chain," Sustainability, MDPI, vol. 12(4), pages 1-25, February.
    17. Weiling Wang & Yongjian Wang & Xiaoqing Zhang & Dalin Zhang, 2021. "Effects of Government Subsidies on Production and Emissions Reduction Decisions under Carbon Tax Regulation and Consumer Low-Carbon Awareness," IJERPH, MDPI, vol. 18(20), pages 1-17, October.
    18. Wang, Jian & Zhu, Wenbo, 2023. "Analyzing the development of competition and cooperation among ocean carriers considering the impact of carbon tax policy," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 175(C).
    19. Zongyu Mu & Qiujie Li & Gengxin Dai & Ke Li & Guangming Zhang & Fan Zhang, 2022. "Government Subsidy Policy and Online Selling Strategy in a Platform Supply Chain with Green R&D and DDM Activities," Sustainability, MDPI, vol. 14(15), pages 1-23, August.

    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. Taleizadeh, Ata Allah & Sadeghi, Razieh, 2019. "Pricing strategies in the competitive reverse supply chains with traditional and e-channels: A game theoretic approach," International Journal of Production Economics, Elsevier, vol. 215(C), pages 48-60.
    2. Cheng, Fei & Chen, Tong & Chen, Qiao, 2022. "Cost-reducing strategy or emission-reducing strategy? The choice of low-carbon decisions under price threshold subsidy," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 157(C).
    3. Dongxue Guo & Yi He & Yuanyuan Wu & Qingyun Xu, 2016. "Analysis of Supply Chain under Different Subsidy Policies of the Government," Sustainability, MDPI, vol. 8(12), pages 1-18, December.
    4. Biao Li & Yong Geng & Xiqiang Xia & Dan Qiao & Hao Wang, 2021. "Comparatively Analyzing the Impact of Government Subsidy and Carbon Tax Policy on Authorized Remanufacturing," IJERPH, MDPI, vol. 18(16), pages 1-18, August.
    5. Jin, Minyue & Zhang, Xueqing & Xiong, Yu & Zhou, Yu, 2021. "Implications of green optimism upon sustainable supply chain management," European Journal of Operational Research, Elsevier, vol. 295(1), pages 131-139.
    6. Chang Su & Xiaojing Liu & Wenyi Du, 2020. "Green Supply Chain Decisions Considering Consumers’ Low-Carbon Awareness under Different Government Subsidies," Sustainability, MDPI, vol. 12(6), pages 1-12, March.
    7. Sun, Ya-Fang & Zhang, Yue-Jun & Su, Bin, 2022. "Impact of government subsidy on the optimal R&D and advertising investment in the cooperative supply chain of new energy vehicles," Energy Policy, Elsevier, vol. 164(C).
    8. Juanjuan Qin & Liguo Ren & Liangjie Xia, 2017. "Carbon Emission Reduction and Pricing Strategies of Supply Chain under Various Demand Forecasting Scenarios," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 34(01), pages 1-27, February.
    9. Bowon Kim & Jeong Eun Sim, 2016. "Supply Chain Coordination and Consumer Awareness for Pollution Reduction," Sustainability, MDPI, vol. 8(4), pages 1-20, April.
    10. Yurong Chen & Juan Zhang, 2024. "Impact of Consumer Subsidy Considering Subsidy Threshold on New Energy Vehicle Firms and Environmental Benefits," Sustainability, MDPI, vol. 16(6), pages 1-22, March.
    11. Chen, Wenbo, 2018. "Retailer-driven carbon emission abatement with consumer environmental awareness and carbon tax: Revenue-sharing versus Cost-sharingAuthor-Name: Yang, Huixiao," Omega, Elsevier, vol. 78(C), pages 179-191.
    12. Yongjian Li & Qianzhou Deng & Chi Zhou & Lipan Feng, 2020. "Environmental governance strategies in a two-echelon supply chain with tax and subsidy interactions," Annals of Operations Research, Springer, vol. 290(1), pages 439-462, July.
    13. Ma, Junhai & Hou, Yaming & Wang, Zongxian & Yang, Wenhui, 2021. "Pricing strategy and coordination of automobile manufacturers based on government intervention and carbon emission reduction," Energy Policy, Elsevier, vol. 148(PA).
    14. Takuro Miyamoto, 2023. "Green product diffusion and innovation in supply chains," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 25(3), pages 331-353, July.
    15. Fan, Zhi-Ping & Cao, Yue & Huang, Chun-Yong & Li, Yongli, 2020. "Pricing strategies of domestic and imported electric vehicle manufacturers and the design of government subsidy and tariff policies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 143(C).
    16. Hui Li & Chuanxu Wang & Meng Shang & Wei Ou, 2017. "Pricing, Carbon Emission Reduction, Low-Carbon Promotion and Returning Decision in a Closed-Loop Supply Chain under Vertical and Horizontal Cooperation," IJERPH, MDPI, vol. 14(11), pages 1-26, November.
    17. Chunhai Yu & Yingxiang Zhang & Ling Liu & Thomas W. Archibald, 2024. "Low-carbon supply chain strategy and contract coordination considering manufacturers′ fairness concerns," Operational Research, Springer, vol. 24(4), pages 1-51, December.
    18. Ouyang, Jianjun & Fu, Jie, 2023. "Energy-saving and subsidy policy decisions for double competition manufacturers," Energy Economics, Elsevier, vol. 117(C).
    19. Juan Zhang & Ziyue Wang & Huiju Zhao, 2020. "The Impact of Consumer Subsidy on Green Technology Innovations for Vehicles and Environmental Impact," IJERPH, MDPI, vol. 17(20), pages 1-24, October.
    20. Yuanqiao Chen & Zhisong Chen & Jianhui Peng, 2021. "How does emission right-based lending contribute to sustainable production and green financing? A modelling study," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(9), pages 13945-13972, September.

    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:jsusta:v:11:y:2019:i:8:p:2209-:d:222271. 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.