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Stochastic Pricing and Order Model with Transportation Mode Selection for Low-Carbon Retailers

Author

Listed:
  • Yi Zheng

    (School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 611731, China
    Department of Industrial Engineering, School of Construction and Management Engineering, Xihua University, Chengdu 610039, China)

  • Huchang Liao

    (Business School, Sichuan University, Chengdu 610065, China)

  • Xue Yang

    (Business School, Sichuan University, Chengdu 610065, China)

Abstract

More and more enterprises have begun to pay attention to their carbon footprint in the supply chain, of which transportation has become the second major source of carbon emissions. This paper aims to study both optimum pricing and order quantities, considering consumer demand and the selection of transportation modes by retailers, in terms of carbon emissions sensitivity and price sensitivity under the conditions of a cap-and-trade policy and uncertain market demand. Firstly, we analyze the effects of transportation mode (including transportation costs and transportation-induced carbon emissions), initial emissions allowances, carbon emissions trading price and consumer sensitivity to carbon emissions on the optimum decisions and profits of retailers. The results demonstrate that when consumers are less sensitive to price, the optimum retail price and the optimum order quantity of products are proportional to the transportation cost and transportation-induced carbon emissions of retailers per unit product, the carbon emissions trading price as well as consumer sensitivity to carbon emissions. However, when consumers are highly sensitive to price, the optimum order quantity of products is inversely proportional to the transportation costs and transportation-induced carbon emissions of retailers per unit product, the carbon emissions trading price and consumer sensitivity to carbon emissions. In addition, the optimum retail price of products is inversely proportional to consumer sensitivity to carbon emissions. We also find that retailers prefer a low-carbon transportation mode when the carbon emissions trading price is high. Meanwhile, the carbon emissions trading price influences the carbon emissions trading volume of retailers. These theoretical findings are further validated by some numerical analysis.

Suggested Citation

  • Yi Zheng & Huchang Liao & Xue Yang, 2016. "Stochastic Pricing and Order Model with Transportation Mode Selection for Low-Carbon Retailers," Sustainability, MDPI, vol. 8(1), pages 1-19, January.
    • Handle: RePEc:gam:jsusta:v:8:y:2016:i:1:p:48-:d:61811
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    References listed on IDEAS

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    Cited by:

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    2. Shou-feng Ji & Rong-juan Luo, 2017. "A Hybrid Estimation of Distribution Algorithm for Multi-Objective Multi-Sourcing Intermodal Transportation Network Design Problem Considering Carbon Emissions," Sustainability, MDPI, vol. 9(7), pages 1-24, June.
    3. Ning Geng & Zengjin Liu & Xibing Han & Xiaoyu Zhang, 2022. "Influencing Factors and Group Differences of Urban Consumers’ Willingness to Pay for Low-Carbon Agricultural Products in China," IJERPH, MDPI, vol. 20(1), pages 1-19, December.
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    6. Yonghong Cheng & Zhongkai Xiong & Qinglin Luo, 2018. "Joint Pricing and Product Carbon Footprint Decisions and Coordination of Supply Chain with Cap-and-Trade Regulation," Sustainability, MDPI, vol. 10(2), pages 1-24, February.

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