Abstract
In order to make optimal decisions for pricing and emission reduction, a remanufacturing supply chain system with dual-sale channels is investigated. With regard to the preferences of consumers for different channels and carbon cap-and-trade mechanisms, profit-maximization models are developed on supply chain members and systems in decentralized and centralized cases. Based on a backward induction, the corresponding formulae for decision variables are obtained. Then the effect of the industry emission control coefficient is analyzed and the optimal decisions of two cases are compared. Finally, the coordination mechanism and numerical analysis are presented. The result indicates that: (1) As the free carbon allowances granted by the government to the manufacturer increases, the investment in carbon reduction from the manufacturer will increase. As the industry emission control coefficient increases, the carbon emissions per product and the prices of new and remanufactured products will decrease, while the demands of the new and remanufactured products and the profits of supply chain members and systems will increase. (2) As the direct sale channel preference coefficient increases, the profits of the manufacturer and the system will increase while the retailer’s profit will decrease. Correspondingly, the carbon emissions of unit product will decrease, and the sales of the direct sale channel will increase while the sales of the retail channel will decrease. (3) The decision in the coordinated case not only ensures emission reduction and system profit to reach the level of the centralized case, but also raises the profits of supply chain members in the decentralized case. Therefore, it is preferable to other decisions. (4) As the carbon trading price increases, the emission reduction investment from the manufacturer will increase while the profits of the supply chain and its members will increase.
Highlights
To meet the increasingly individualized, diversified and enlarged demands of consumers, enterprises endeavor to expand their production capacity
The carbon trading mechanism means that to reduce carbon emissions, the government sets an industry control coefficient based on the historical emission intensity of enterprise to allocate free carbon emission allowances, and the enterprise can buy or sell carbon emissions right in the carbon trading market according to its actual emissions
These problems are solved by making product prices and carbon emission reductions reach the optimal values in the centralized case
Summary
To meet the increasingly individualized, diversified and enlarged demands of consumers, enterprises endeavor to expand their production capacity. Remanufacturing is an environmentally friendly production method of activities such as disassembling, inspecting, repairing/reworking and reassembling It utilizes the main components of waste products to produce remanufactured products [4]. Dell sells remanufactured products via the online channel “Dell Outlet” and new products via retail and online stores [11]. Under a CCT-mechanism, enterprises are faced with the increasing pressure to reduce emission and investment in carbon emissions reduction will be unavoidable. When introducing the CCT-mechanism and dual-sale channels, to obtain a greater profits of supply chain system and members, besides considering the competition between different sale channels, it is essential to coordinate different participants’ decisions and manufacturers’ production, pricing and emission reduction investment decisions, which makes remanufacturing supply chains’ decisions very complicated. Under a CCT-mechanism, the purpose of this article is to determine the optimal pricing and emission reduction decisions of different participants, and design appropriate contracts to raise the profits of supply chain members and systems
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