IDEAS home Printed from https://ideas.repec.org/a/spr/endesu/v25y2023i6d10.1007_s10668-022-02255-0.html
   My bibliography  Save this article

Pricing and greening strategies in a dual-channel supply chain with cost and profit sharing contracts

Author

Listed:
  • Rubi Das

    (National Institute of Technology Silchar)

  • Abhijit Barman

    (National Institute of Technology Silchar)

  • Balaji Roy

    (Presidency University)

  • Pijus Kanti De

    (National Institute of Technology Silchar)

Abstract

The expanding customer consciousness of ecological sustainability has motivated supply chain members to participate in green activities. In this paper, the coordination issue of a dual-channel supply chain is studied under consideration of the greening level of the items. The two-stage supply chain consists of a manufacturer and a retailer. The manufacturer is responsible for keeping the item’s greening level and sells the products through two channels (a) a direct online channel and (b) a traditional retail channel. Market demand depends on the selling price and greening level of the item. Furthermore, the pricing and greening strategies of the channel members are discussed under the centralized and decentralized scenarios. Compared to the centralized scenario, optimum pricing at the retail channel is higher in the decentralized scenario while the greening level of products is low. The outcomes exhibit that the profit of the supply chain in a decentralized scenario decreases compared to the centralized scenario. To enhance the supply chain profit, we have developed two coordinate mechanisms of the decentralized scenario with a cost-sharing contract and a profit-sharing contract. Our analysis shows that the profit-sharing contract can realize the coordination, but the cost-sharing contract cannot. A numerical example has been demonstrated to quantify the effectiveness of different contracts, and the model’s finding is demonstrated.

Suggested Citation

  • Rubi Das & Abhijit Barman & Balaji Roy & Pijus Kanti De, 2023. "Pricing and greening strategies in a dual-channel supply chain with cost and profit sharing contracts," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(6), pages 5053-5086, June.
    • Handle: RePEc:spr:endesu:v:25:y:2023:i:6:d:10.1007_s10668-022-02255-0
    DOI: 10.1007/s10668-022-02255-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10668-022-02255-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10668-022-02255-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rubi Das & Pijus Kanti De & Abhijit Barman, 2021. "Pricing and ordering strategies in a two-echelon supply chain under price discount policy: a Stackelberg game approach," Journal of Management Analytics, Taylor & Francis Journals, vol. 8(4), pages 646-672, October.
    2. Pietro Giovanni, 2014. "Environmental collaboration in a closed-loop supply chain with a reverse revenue sharing contract," Annals of Operations Research, Springer, vol. 220(1), pages 135-157, September.
    3. 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.
    4. Xiaojing Liu & Wenyi Du & Yijie Sun, 2020. "Green Supply Chain Decisions Under Different Power Structures: Wholesale Price vs. Revenue Sharing Contract," IJERPH, MDPI, vol. 17(21), pages 1-18, October.
    5. Zhaojun Yang & Jun Sun & Yali Zhang & Ying Wang, 2020. "Synergy between green supply chain management and green information systems on corporate sustainability: an informal alignment perspective," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(2), pages 1165-1186, February.
    6. Heydari, Jafar & Govindan, Kannan & Aslani, Amin, 2019. "Pricing and greening decisions in a three-tier dual channel supply chain," International Journal of Production Economics, Elsevier, vol. 217(C), pages 185-196.
    7. M. Boronoos & M. Mousazadeh & S. Ali Torabi, 2021. "A robust mixed flexible-possibilistic programming approach for multi-objective closed-loop green supply chain network design," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(3), pages 3368-3395, March.
    8. Zhaofu Hong & Hao Wang & Yeming Gong, 2019. "Green product design considering functional-product reference," Post-Print hal-02312293, HAL.
    9. Shen, Bin & Choi, Tsan-Ming & Chan, Hau-Ling, 2019. "Selling green first or not? A Bayesian analysis with service levels and environmental impact considerations in the Big Data Era," Technological Forecasting and Social Change, Elsevier, vol. 144(C), pages 412-420.
    10. Hong, Zhaofu & Wang, Hao & Gong, Yeming, 2019. "Green product design considering functional-product reference," International Journal of Production Economics, Elsevier, vol. 210(C), pages 155-168.
    11. 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.
    12. Kyle Cattani & Wendell Gilland & Hans Sebastian Heese & Jayashankar Swaminathan, 2006. "Boiling Frogs: Pricing Strategies for a Manufacturer Adding a Direct Channel that Competes with the Traditional Channel," Production and Operations Management, Production and Operations Management Society, vol. 15(1), pages 40-56, March.
    13. Ma, Peng & Wang, Haiyan & Shang, Jennifer, 2013. "Contract design for two-stage supply chain coordination: Integrating manufacturer-quality and retailer-marketing efforts," International Journal of Production Economics, Elsevier, vol. 146(2), pages 745-755.
    14. Abhijit Barman & Rubi Das & Pijus Kanti De & Shib Sankar Sana, 2021. "Optimal Pricing and Greening Strategy in a Competitive Green Supply Chain: Impact of Government Subsidy and Tax Policy," Sustainability, MDPI, vol. 13(16), pages 1-20, August.
    15. Khorshidvand, Behrooz & Soleimani, Hamed & Sibdari, Soheil & Seyyed Esfahani, Mir Mehdi, 2021. "Revenue management in a multi-level multi-channel supply chain considering pricing, greening, and advertising decisions," Journal of Retailing and Consumer Services, Elsevier, vol. 59(C).
    16. Yao, Z. & Leung, Stephen C.H. & Lai, K.K., 2008. "Manufacturer's revenue-sharing contract and retail competition," European Journal of Operational Research, Elsevier, vol. 186(2), pages 637-651, April.
    17. Qinghua Li & Bo Li & Ping Chen & Pengwen Hou, 2017. "Dual-channel supply chain decisions under asymmetric information with a risk-averse retailer," Annals of Operations Research, Springer, vol. 257(1), pages 423-447, October.
    18. Mithu Rani Kuiti & Debabrata Ghosh & Sirish Gouda & Sanjeev Swami & Ravi Shankar, 2019. "Integrated product design, shelf-space allocation and transportation decisions in green supply chains," International Journal of Production Research, Taylor & Francis Journals, vol. 57(19), pages 6181-6201, October.
    19. Giorgos Papagiannakis & Irini Voudouris & Spyros Lioukas, 2014. "The Road to Sustainability: Exploring the Process of Corporate Environmental Strategy Over Time," Business Strategy and the Environment, Wiley Blackwell, vol. 23(4), pages 254-271, May.
    20. Hamed Jafari & Seyed Reza Hejazi & Morteza Rasti-Barzoki, 2016. "Pricing Decisions in Dual-Channel Supply Chain Including Monopolistic Manufacturer and Duopolistic Retailers: A Game-Theoretic Approach," Journal of Industry, Competition and Trade, Springer, vol. 16(3), pages 323-343, September.
    21. Li, Bo & Hou, Peng-Wen & Chen, Ping & Li, Qing-Hua, 2016. "Pricing strategy and coordination in a dual channel supply chain with a risk-averse retailer," International Journal of Production Economics, Elsevier, vol. 178(C), pages 154-168.
    22. 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.
    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. Asgari, Erfan & Hammami, Ramzi & Frein, Yannick & Nouira, Imen, 2021. "The effect of greenness- and price-based competition on a product's environmental performance," International Journal of Production Economics, Elsevier, vol. 234(C).
    2. Li, Guo & Wu, Huamin & Sethi, Suresh P. & Zhang, Xiang, 2021. "Contracting green product supply chains considering marketing efforts in the circular economy era," International Journal of Production Economics, Elsevier, vol. 234(C).
    3. Li, Jin & Hu, Zening & Shi, Victor & Wang, Qian, 2021. "Manufacturer's encroachment strategy with substitutable green products," International Journal of Production Economics, Elsevier, vol. 235(C).
    4. Shengliang Zong & Chunyang Shen & Siping Su, 2022. "Decision Making in Green Supply Chain with Manufacturers’ Misreporting Behavior," Sustainability, MDPI, vol. 14(9), pages 1-28, April.
    5. Ren, Da & Guo, Rui & Lan, Yanfei & Shang, Changjing, 2021. "Shareholding strategies for selling green products on online platforms in a two-echelon supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    6. Xia, Senmao & Ling, Yantao & de Main, Leanne & Lim, Ming K. & Li, Gendao & Zhang, Peter & Cao, Mengqiu, 2022. "Creating a low carbon economy through green supply chain management: investigation of willingness-to-pay for green products from a consumer’s perspective," LSE Research Online Documents on Economics 116895, London School of Economics and Political Science, LSE Library.
    7. Zhou, Yu & Yan, Shuangqi & Li, Gendao & Xiong, Yu & Lin, Zhibin, 2023. "The impact of consumer skepticism on blockchain-enabled sustainability disclosure in a supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    8. Junbin Wang & Xuan Gao & Zhiguo Wang, 2021. "Sustainable Supply Chain Decisions under E-Commerce Platform Marketplace with Competition," Sustainability, MDPI, vol. 13(8), pages 1-23, April.
    9. Hou, Pengwen & Wang, Jun & Zhang, Qian & Zhang, Shuhua, 2023. "Implications of risk aversion behavior on the green product promotion strategy under manufacturer encroachment," Applied Mathematics and Computation, Elsevier, vol. 447(C).
    10. Hafezi, Maryam & Zhao, Xuan & Zolfagharinia, Hossein, 2023. "Together we stand? Co-opetition for the development of green products," European Journal of Operational Research, Elsevier, vol. 306(3), pages 1417-1438.
    11. Barman, Abhijit & De, Pijus Kanti & Chakraborty, Ashis Kumar & Lim, Chee Peng & Das, Rubi, 2023. "Optimal pricing policy in a three-layer dual-channel supply chain under government subsidy in green manufacturing," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 204(C), pages 401-429.
    12. Chenbo Zhu & Juntian Yue & Jing Chen, 2022. "Green Product Development and Order Strategies for Retailers," Sustainability, MDPI, vol. 14(15), pages 1-18, August.
    13. Wang, Zizhuo & Wang, Mingzheng & Liu, Weiwei, 2020. "To introduce competition or not to introduce competition: An analysis of corporate social responsibility investment collaboration in a two-echelon supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 133(C).
    14. Fan, Jianchang & Ni, Debing & Fang, Xiang, 2020. "Liability cost sharing, product quality choice, and coordination in two-echelon supply chains," European Journal of Operational Research, Elsevier, vol. 284(2), pages 514-537.
    15. Xuan Wang & Chi To Ng, 2020. "New retail versus traditional retail in e-commerce: channel establishment, price competition, and consumer recognition," Annals of Operations Research, Springer, vol. 291(1), pages 921-937, August.
    16. 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).
    17. Asl-Najafi, Javad & Yaghoubi, Saeed & Zand, Fatemeh, 2021. "Dual-channel supply chain coordination considering targeted capacity allocation under uncertainty," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 187(C), pages 566-585.
    18. Peng, Yongtao & Wang, Wei & Li, Shuanglin & Veglianti, Eleonora, 2022. "Competition and cooperation in the dual-channel green supply chain with customer satisfaction," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 95-113.
    19. Syed Asif Raza, 2022. "A bibliometric analysis of pricing models in supply chain," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(2), pages 228-251, April.
    20. Raza, Syed Asif & Govindaluri, Srikrishna Madhumohan, 2019. "Pricing strategies in a dual-channel green supply chain with cannibalization and risk aversion," Operations Research Perspectives, Elsevier, vol. 6(C).

    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:spr:endesu:v:25:y:2023:i:6:d:10.1007_s10668-022-02255-0. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.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.