Abstract
This paper studies the dynamic optimization of a low-carbon supply chain consisting of a manufacturer and a capital-constrained retailer. Considering market randomness and accumulation of production experience, a Stackelberg differential game model is constructed. In the game, the manufacturer is the leader and its pricing and emission reduction strategies over time are deduced in farsighted and myopic behaviors, respectively. In both behaviors, the emission reduction increases over time and a relatively low/high carbon price leads to skimming/penetrating pricing strategy of the manufacturer. Numerical study shows that the manufacturer must adopt a farsighted behavior for profit seeking except that consumers’ low-carbon awareness is quite low, and the retailer also prefers the manufacturer to adopt this behavior. Increasing carbon price and consumers’ low-carbon awareness benefits the manufacturer rather than the retailer. The governments can take measures to raise the carbon price to reduce the environmental impact.
Highlights
With the rapid development of world economies and the increasing frequency of human activities, the huge greenhouse gas emissions have brought severe challenges to the world climate
Developing a low-carbon economy is crucial to the sustainability of countries all over the world
SMEs must simultaneously make decisions on operations management, emission reduction, and financing when they are subject to capital constraints and cap-and-trade regulations
Summary
Received 10 November 2021; Revised 19 December 2021; Accepted 12 January 2022; Published 9 February 2022. Is paper studies the dynamic optimization of a low-carbon supply chain consisting of a manufacturer and a capital-constrained retailer. The manufacturer is the leader and its pricing and emission reduction strategies over time are deduced in farsighted and myopic behaviors, respectively. In both behaviors, the emission reduction increases over time and a relatively low/ high carbon price leads to skimming/penetrating pricing strategy of the manufacturer. Numerical study shows that the manufacturer must adopt a farsighted behavior for profit seeking except that consumers’ low-carbon awareness is quite low, and the retailer prefers the manufacturer to adopt this behavior. Increasing carbon price and consumers’ low-carbon awareness benefits the manufacturer rather than the retailer. Increasing carbon price and consumers’ low-carbon awareness benefits the manufacturer rather than the retailer. e governments can take measures to raise the carbon price to reduce the environmental impact
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