IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i14p6038-d1435566.html
   My bibliography  Save this article

Pricing and Inventory Decisions for the Apparel Industry under a Carbon Neutrality Target with Green Investments and Recycling Efforts

Author

Listed:
  • Jin Zhao

    (Glorious Sun School of Business and Management, Donghua University, Shanghai 200051, China
    Saic Volkswagen Automotive Co., Ltd., Shanghai 201805, China)

  • Qi Xu

    (Glorious Sun School of Business and Management, Donghua University, Shanghai 200051, China)

Abstract

The apparel industry is the second largest source of pollution globally, following only the petrochemical industry in terms of environmental pollution caused by production, sales, and consumption processes. Low-carbon, environmentally friendly, and energy-efficient production and consumption methods are crucial pathways for the apparel industry to achieve carbon neutrality targets. Therefore, considering green investments in apparel products and the recycling of discarded apparel, this paper investigated the inventory and pricing optimization decisions of apparel enterprises within the context of a carbon neutrality target. The results indicated that green investment or recycling can effectively increase the total profits of the apparel brand. Due to the cumulative effect of comprehensive environmental strategies, apparel brands achieve greater profits when simultaneously adopting both green investments and recycling efforts compared to implementing either one alone. Green investments focus on reducing the environmental impact during production by minimizing resource consumption and emissions from the source, while recycling emphasizes product reutilization, effectively extending the utilization cycle of resources. By implementing these two strategies, brands not only reduce the negative environmental impacts during production but also maximize resource reuse throughout the product lifecycle.

Suggested Citation

  • Jin Zhao & Qi Xu, 2024. "Pricing and Inventory Decisions for the Apparel Industry under a Carbon Neutrality Target with Green Investments and Recycling Efforts," Sustainability, MDPI, vol. 16(14), pages 1-25, July.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:14:p:6038-:d:1435566
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/14/6038/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/14/6038/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lili Zhou & Qi Chen & Qi Xu, 2021. "Joint Pricing and Inventory Control Decisions for Fashion Apparel with Considering Fashion Level and Partial Backlogging," Mathematical Problems in Engineering, Hindawi, vol. 2021, pages 1-10, January.
    2. Bin Shen & Chen Zhu & Qingying Li & Xiaofeng Wang, 2021. "Green technology adoption in textiles and apparel supply chains with environmental taxes," International Journal of Production Research, Taylor & Francis Journals, vol. 59(14), pages 4157-4174, July.
    3. Wu, Cheng-Han, 2012. "Product-design and pricing strategies with remanufacturing," European Journal of Operational Research, Elsevier, vol. 222(2), pages 204-215.
    4. K Kogan & U Spiegel, 2006. "Optimal policies for inventory usage, production and pricing of fashion goods over a selling season," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(3), pages 304-315, March.
    5. Chialin Chen, 2001. "Design for the Environment: A Quality-Based Model for Green Product Development," Management Science, INFORMS, vol. 47(2), pages 250-263, February.
    6. Guo, Shu & Choi, Tsan-Ming & Shen, Bin, 2020. "Green product development under competition: A study of the fashion apparel industry," European Journal of Operational Research, Elsevier, vol. 280(2), pages 523-538.
    7. Cai, Ya-Jun & Choi, Tsan-Ming & Zhang, Ting, 2022. "Commercial used apparel collection operations in retail supply chains," European Journal of Operational Research, Elsevier, vol. 298(1), pages 169-181.
    8. Gérard P. Cachon, 2014. "Retail Store Density and the Cost of Greenhouse Gas Emissions," Management Science, INFORMS, vol. 60(8), pages 1907-1925, August.
    9. Meng, Xiaoge & Yao, Zhong & Nie, Jiajia & Zhao, Yingxue, 2018. "Make or buy? It is the question: A study in the presence of carbon tax," International Journal of Production Economics, Elsevier, vol. 195(C), pages 328-337.
    10. Choi, Tsan-Ming, 2007. "Pre-season stocking and pricing decisions for fashion retailers with multiple information updating," International Journal of Production Economics, Elsevier, vol. 106(1), pages 146-170, March.
    11. Qi Chen & Qi Xu & Wenjie Wang, 2019. "Optimal Policies for the Pricing and Replenishment of Fashion Apparel considering the Effect of Fashion Level," Complexity, Hindawi, vol. 2019, pages 1-12, February.
    12. Ferrer, Geraldo & Swaminathan, Jayashankar M., 2010. "Managing new and differentiated remanufactured products," European Journal of Operational Research, Elsevier, vol. 203(2), pages 370-379, June.
    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. Li, Gendao & Reimann, Marc & Zhang, Weihua, 2018. "When remanufacturing meets product quality improvement: The impact of production cost," European Journal of Operational Research, Elsevier, vol. 271(3), pages 913-925.
    2. Hong, Zhaofu & Li, Mengfan & Han, Xiaoya & He, Xuhuai, 2020. "Innovative green product diffusion through word of mouth," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 134(C).
    3. Dingzhong Feng & Lei Ma & Yangke Ding & Guanghua Wu & Ye Zhang, 2019. "Decisions of the Dual-Channel Supply Chain under Double Policy Considering Remanufacturing," IJERPH, MDPI, vol. 16(3), pages 1-20, February.
    4. Zheng, Xiong & Govindan, Kannan & Deng, Qianzhou & Feng, Lipan, 2019. "Effects of design for the environment on firms’ production and remanufacturing strategies," International Journal of Production Economics, Elsevier, vol. 213(C), pages 217-228.
    5. Yu, Yugang & Zhou, Sijie & Shi, Ye, 2020. "Information sharing or not across the supply chain: The role of carbon emission reduction," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 137(C).
    6. Yang, Yuxiang & Goodarzi, Shadi & Jabbarzadeh, Armin & Fahimnia, Behnam, 2022. "In-house production and outsourcing under different emissions reduction regulations: An equilibrium decision model for global supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 157(C).
    7. Wu, Cheng-Han, 2015. "Strategic and operational decisions under sales competition and collection competition for end-of-use products in remanufacturing," International Journal of Production Economics, Elsevier, vol. 169(C), pages 11-20.
    8. Xiong, Yu & Zhou, Yu & Li, Gendao & Chan, Hing-Kai & Xiong, Zhongkai, 2013. "Don’t forget your supplier when remanufacturing," European Journal of Operational Research, Elsevier, vol. 230(1), pages 15-25.
    9. Xiaofeng Long & Tong Shu & Shou Chen & Shouyang Wang & Kin Keung Lai & Yan Yang, 2017. "Strategy Analysis of Recycling and Remanufacturing by Remanufacturers in Closed-Loop Supply Chain," Sustainability, MDPI, vol. 9(10), pages 1-29, October.
    10. Ahmad Fadavi & Fariborz Jolai & Ata Allah Taleizadeh, 2022. "Green product design in a supply chain with considering marketing under competition and coordination," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(10), pages 11721-11759, October.
    11. Tao, Yi & Wu, Jianhuang & Lai, Xiaofan & Wang, Fan, 2020. "Network planning and operation of sustainable closed-loop supply chains in emerging markets: Retail market configurations and carbon policies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 144(C).
    12. Qian, Zhifeng & Day, Steven James & Ignatius, Joshua & Dhamotharan, Lalitha & Chai, Junwu, 2024. "Digital advertising spillover, online-exclusive product launches, and manufacturer-remanufacturer competition," European Journal of Operational Research, Elsevier, vol. 313(2), pages 565-586.
    13. Cheng-Han Wu, 2021. "Production-quality policy for a make-from-stock remanufacturing system," Flexible Services and Manufacturing Journal, Springer, vol. 33(2), pages 425-456, June.
    14. Aydin, R. & Kwong, C.K. & Ji, P., 2015. "A novel methodology for simultaneous consideration of remanufactured and new products in product line design," International Journal of Production Economics, Elsevier, vol. 169(C), pages 127-140.
    15. Liu, Zhuojun & Chen, Jing & Diallo, Claver, 2018. "Optimal production and pricing strategies for a remanufacturing firm," International Journal of Production Economics, Elsevier, vol. 204(C), pages 290-315.
    16. Zhang, Yunrong & Hong, Zhaofu & Chen, Zhixiang & Glock, Christoph H., 2020. "Tax or subsidy? Design and selection of regulatory policies for remanufacturing," European Journal of Operational Research, Elsevier, vol. 287(3), pages 885-900.
    17. Bin Shen & Yifan Cao & Xiaoyan Xu, 2020. "Product line design and quality differentiation for green and non-green products in a supply chain," International Journal of Production Research, Taylor & Francis Journals, vol. 58(1), pages 148-164, January.
    18. Wu, Cheng-Han, 2013. "OEM product design in a price competition with remanufactured product," Omega, Elsevier, vol. 41(2), pages 287-298.
    19. Cetin, Can Baris & Zaccour, Georges, 2023. "Remanufacturing with innovative features: A strategic analysis," European Journal of Operational Research, Elsevier, vol. 310(2), pages 655-669.
    20. Qixiang Wang & Xiaobo Wang, 2022. "Does Product Eco-design Promote Remanufacturing: Application of a Stylized Game-theoretic Model," Sustainability, MDPI, vol. 15(1), pages 1-20, December.

    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:16:y:2024:i:14:p:6038-:d:1435566. 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.