Abstract
The environmental input of a store brand product’s green supply chain plays an important role in improving the product brand image and expanding the product demand. According to the difference of the initial one-off environmental investment of the store brand product, it can be divided into three modes: direct OEM, retailer’s full participation and retailer’s partial participation. The research methods employed in this study include model establishment, numerical analysis and comparison under three entrustment modes based on retailers’ negotiation strength. In addition, sensitivity analysis was used to test the influence of parameter variations on the results. The research results show that: (i) the direct OEM mode is the best choice for retailers when the retailer is in a weak position, but it is not the best choice for the manufacturer. With the increase of the retailers’ negotiation strength, the profits of both sides will decline, causing the problem of double marginal profit decreasing; (ii) the retailer’s full participation mode is the best choice for the manufacturer when the retailer is in a strong position, but not the best choice for the retailer. It is not the best choice for both sides when the retailer is in a weak position; (iii) the greenness and total profit of the supply chain are no relative with the negotiation strength of the retailer under the partial participation mode, and the greenness and total profit of the supply chain are the same as the condition under the integrated control to achieve the best coordination effect.
Highlights
With the rapid development of the economy and increasingly fierce competition in the market, the traditional partnership between manufacturers and retailers within the supply chain has become diversified and complicated [1]
The practical value of our research is mainly embodied in the following aspects: (1) this study explores the impact of the three different entrusted production modes of store brand products, which are real and significant on the optimal strategies and green supply chain members’ profit; the subject of this study is closely related to the real background and has practical significance
(iii) Comparing the greenness of product and the total profit of supply chain under mode A and mode B, we find that mode A is better than mode B when the negotiation strength of the retailer is in the interval μ ∈ [0, 0.5], and mode B is better than mode A when the negotiation strength of the retailer is in the interval μ ∈ [0.5, 1]
Summary
With the rapid development of the economy and increasingly fierce competition in the market, the traditional partnership between manufacturers and retailers within the supply chain has become diversified and complicated [1]. (2) This study reveals the retailer’s negotiation strength on the optimal product greenness decision and the total profit of green supply chain under the impact mechanism of the three different entrusted production modes, and presents a sensitivity analysis of parameter variations on equilibrium solutions in the context of subsidy. The practical value of our research is mainly embodied in the following aspects: (1) this study explores the impact of the three different entrusted production modes of store brand products, which are real and significant on the optimal strategies and green supply chain members’ profit; the subject of this study is closely related to the real background and has practical significance. The rest of this paper is organized as follows: Section 2 is a literature review, Section 3 describes the problems for research, Section 4 establishes the basic model, Section 5 studies the green supply chain coordination under different production modes, Section 6 analyzes and compares different entrusted production modes, Section 7 is the numerical example and sensitivity analysis, Section 8 indicates the research results and discussions, and the last part is draws a conclusion and presents limitations
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