An incentive mechanism-based negotiation model for green supply chain networks

Abstract

This research aims to prompt agents to improve their strategies initiatively in order to decrease carbon dioxide emissions and enhance green factors during production and consumption processes. An incentive negotiation mechanism is proposed for agents in supply chains to improve their strategies. Multiple items, multiple attributes, and multiple echelons are involved in the proposed model. In addition, this research takes both the commerce and the environmental attributes into account. The environmental attributes were transformed into rewards or penalty by setting reward factors or penalty factors, and were taken into account during the calculation of the profits. The simulation results show that the proposed model was feasible to solve the complex negotiation problems, and had a good performance. The green factors of agents in the green supply chain network are increased when the agents have low initial green factors. Moreover, the proposed model can effectively reduce the carbon dioxide emissions as well. The proposed model can be seen as a “win–win” solution from the perspective of both business and environmental protection. The total profit of the green supply chain network is improved, and the harm to the environment is decreased as well.