Abstract
This paper is contended with the joint emission reduction and pricing decision problems, as well as coordination contract design issue for a class of low-carbon supply chain system. Here, the evolution of emission reduction level is characterized by a linear differential equation. Also, product demand depends on emission reduction level, promotional effort, and retail price in a separable multiplicative way. By considering an optimal control model of the low-carbon supply chain, differential game theory is used to obtain the optimal joint emission reduction efforts, pricing strategies, and the optimal emission reduction level in different decision systems. Subsequently, attention is focused on the design of new coordination contract with the fixed or varied wholesale price such that, under the dynamic decision perspective, supply chain system can realize the win-win situation of economy and ecology, as well as the profits of individual members are Pareto improvement. Finally, several numerical examples are given to show the validity and feasibility of the presented results.
Highlights
The rapid development of the economy over recent years has catalyzed the deterioration of the ecological environment, mainly reflected in atmospheric pollution, climate change, global warming, and so on
Based on observations and analysis, we aim to examine the joint emission reduction strategies, pricing strategies and new coordination contract design in the low-carbon supply chain
The following key questions are addressed in this paper: First, how do the supply chain members determine the joint emission reduction and pricing strategies? Second, how does the trajectory of emission reduction level change over time? Third, how to design new coordination contracts by extending the traditional wholesale price contract? The main contribution of this work is listed as follows: First, both joint emission reduction and pricing strategies are discussed for the low-carbon supply chain in the centralized and decentralized systems
Summary
The rapid development of the economy over recent years has catalyzed the deterioration of the ecological environment, mainly reflected in atmospheric pollution, climate change, global warming, and so on. It is meaningful to design the extended wholesale price contract to coordinate the low-carbon supply chain and improve economic performance as well as the environmental benefit. Based on observations and analysis, we aim to examine the joint emission reduction strategies, pricing strategies and new coordination contract design in the low-carbon supply chain. The main contribution of this work is listed as follows: First, both joint emission reduction and pricing strategies are discussed for the low-carbon supply chain in the centralized and decentralized systems. This paper will provide a theoretical basis for optimal strategies and the coordination contract design for the low-carbon supply chain. These contracts can coordinate the benefit conflicts and achieve a win-win outcome
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