Decision-making and coordination of green closed-loop supply chain with fairness concern

Abstract

This paper considers a green closed-supply chain consisting of a manufacturer and a retailer. A Stackelberg game model of centralized decision-making and decentralized decision-making with manufacturer’s fairness concern was constructed based on the consideration of retailer’s sales effort. The decision-making of supply chain members under the above two situations and their reasons are analyzed in depth. According to the model, a green closed-loop supply chain with profit sharing contract coordination fairness is designed. Finally, the correctness of the model is verified by numerical simulation. We generate our findings from three aspects, as follows: when the manufacturer has fair concern behavior, it is not conducive to the environmental performance of green products, resulting in waste of resources, but also forcing retailers to reduce sales efforts and increase the retail price of products. Finally, the benefits of green closed-loop supply chain are seriously damaged. The profit-sharing contract could improve the relationship between members of the supply chain to achieve sustainable economic and environmental development.