A supply chain model with two competitive buyers under a hybrid greening cost and revenue-sharing contract

Abstract

This article considers a vendor-buyer supply chain model where a single vendor produces a single product and markets it through two competitive buyers to a group of customers. The customer demand for the product depends on the selling price, green level and warranty period of the product. Successive deliveries from the vendor are scheduled at a fixed time interval wherein the subsequent shipments appear when each of the buyer’s inventories from the former delivery has just been cleared out. A hybrid greening cost and revenue sharing (HGRS) contract is introduced, which provides more profit to individual members than their decentralised profits. The numerical study reveals that, under the HGRS contract, customers are influenced to buy a more reliable product at a reasonable price with a higher green level. A sensitivity analysis is also carried out to examine the impact of key model parameters on the optimal results.