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Pricing and Coordination Strategies in a Dual Channel Supply Chain with Green Production under Cap and Trade Regulation

Author

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  • Ata Allah Taleizadeh

    (School of Industrial Engineering, College of Engineering, University of Tehran, Tehran 1417935840, Iran)

  • Milad Shahriari

    (School of Industrial Engineering, College of Engineering, University of Tehran, Tehran 1417935840, Iran)

  • Shib Sankar Sana

    (Department of Mathematics, Kishore Bharati Bhagini Nivedita College, R. K. Sarani, Kolkata 700060, India)

Abstract

In this paper, we consider a two level dual channel green supply chain consisting of a retailer and a manufacturer with a separate sales channel for the manufacturer. The manufacturer uses green technology in its production and is required to produce in accordance with the cap and trade regulation. Using game theory, we compare cases where members decide to compete or cooperate with each other in terms of pricing and production. Our main contributions are studying the dual channel supply chain model where a manufacturer is regulated by the cap and trade system, using green production and also on their decision as to whether to compete or cooperate with a value-adding retailer. We also investigated the impact of green production on lowering the amount of carbon emissions produced. In the present study, supply chain members are advised to cooperate with each other in order to achieve the environmental benefits of the cap and trade system and, to avoid market failure, we further recommend that manufacturers should invest in green technologies for their production.

Suggested Citation

  • Ata Allah Taleizadeh & Milad Shahriari & Shib Sankar Sana, 2021. "Pricing and Coordination Strategies in a Dual Channel Supply Chain with Green Production under Cap and Trade Regulation," Sustainability, MDPI, vol. 13(21), pages 1-18, November.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:21:p:12232-:d:673073
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    References listed on IDEAS

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    Cited by:

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    2. Ruijuan Zhao & Yihan Guo & Xiaolin Chu, 2022. "Manufacturer’s Incentive Strategies in a Dual-Channel Supply Chain with Moral Hazard: A Long-Term Perspective," Sustainability, MDPI, vol. 14(22), pages 1-21, November.
    3. Gong, Qiguo & Chen, Guohui & Zhang, Wen & Wang, Hui, 2022. "The role of humans in flexible smart factories," International Journal of Production Economics, Elsevier, vol. 254(C).
    4. Tianyi Guo & Chaonan Li & Yan Chen, 2022. "Remanufacturing Strategy under Cap-and-Trade Regulation in the Presence of Assimilation Effect," Sustainability, MDPI, vol. 14(5), pages 1-19, March.
    5. Yanhong Yuan & Bowen Zhang & Lei Wang & Li Wang, 2022. "Low-Carbon Strategies Considering Corporate Environmental Responsibility: Based on Carbon Trading and Carbon Reduction Technology Investment," Sustainability, MDPI, vol. 14(11), pages 1-18, May.
    6. Chen Liang & Dongshi Sun & Danlan Xie, 2023. "Identifying Waste Supply Chain Coordination Barriers with Fuzzy MCDM," Sustainability, MDPI, vol. 15(6), pages 1-23, March.
    7. Chaonan Li & Tianyi Guo & Yan Chen, 2022. "Robust Emission Reduction Strategies under Cap-and-Trade and Demand Uncertainty," Sustainability, MDPI, vol. 14(20), pages 1-27, October.
    8. Yanbo Ma & Zheng Li & Kaiyue Liu & Zhengmin Liu, 2022. "Price Decision-Making in Dual-Channel Healthcare Services Supply Chain Considering the Channel Acceptance, Price Ceiling, and Public Welfare," IJERPH, MDPI, vol. 19(20), pages 1-23, October.

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