An incentive model between a contractor and multiple subcontractors in a green supply chain based on robust optimization

Abstract

In this paper, we consider the incentive mechanism of a construction supply chain which includes a contractor and several subcontractors from both economic and environmental perspectives. Firstly, we describe the structure of the construction supply chain as well as the relationship between the contractor and subcontractors. Then, a bi-level nonlinear model with multiple followers comprising uncertain parameters is developed to balance the benefits of all supply chain members. In this model, the contractor is the leader while the subcontractors are followers. Next, we convert the primal model into a deterministic counterpart robust model, and a heuristic polynomial algorithm is designed to solve the transformed model. Finally, the validity of the model is verified by a numerical example. Our paper provides a method to quantitatively analyze construction projects from the perspective of supply chains while considering economic performance and environmental performance with the existence of uncertainty.