Differential Game Model of Shared Manufacturing Supply Chain Considering Low-Carbon Emission Reduction

Abstract

In the context of sharing manufacturing, a three-echelon low-carbon supply chain has been established, consisting of the leader-shared manufacturing platform, the follower surplus capacity demander, and the surplus capacity provider. Furthermore, the differential game method is used to determine the best equilibrium strategy for the perfect trajectory of product emission reduction and the ideal profit of supply chain participants in three scenarios: decentralized decision-making, centralized decision-making, and decentralized decision-making based on a two-way cost-sharing contract taking into account the long-term and dynamic nature of emission reduction issues. We compare the three scenarios by using analysis and numerical simulation. The findings show that once the contract was implemented, supply chain members’ levels of effort, product emission reduction, and supply chain system profit reached centralized decision-making levels, achieving the dual Pareto improvement of economic and environmental advantages. The conclusions achieved may be used as a theoretical framework for decision-making by players in the low-carbon supply chain, as well as a collaborative approach.