Environmental Investment Decision of Green Supply Chain considering the Green Uncertainty

Shaobo Wu,Xun Yao,Guangdong Wu,Wei Zhang

doi:10.1155/2020/8871901

Abstract

The uncertainty of eco-friendly intermediate components has an important impact on green supply chain decisions. In this paper, the Stackelberg game model of green investment decision-making among enterprises is established by considering the case of the supplier’s green investment alone and the case of the manufacturer and the supplier’s joint green investment. The influence of green uncertainty on enterprise’s decision-making is analyzed, and the green investment decision-making strategies of both sides in two cases are compared. There are four main conclusions derived from the results: (i) with the increase in the supplier’s green cost coefficient, the supplier will reduce the green investment and the manufacturer will reduce the share of the green costs; (ii) with a decrease in uncertainty for eco-friendly intermediate components and the increase in their feasibility factor, the supplier will increase the greenness of intermediate components and increase the investment in environment, and the manufacturer will reduce the share of the green costs; (iii) the increase in the manufacturer’s share of green costs will promote the supplier to increase the greenness of intermediate components and increase its green investment, which shall increase the supplier’s optional choice space of for green investment; (iv) in the case of the manufacturer and the supplier jointly making a green investment, the threshold value for the environmental input of the supply chain members (i.e., the manufacturer and the supplier) is lower, and the supply chain members will have more choice space. At the same time, the care for environment in the case of a cooperative is higher than that in the case of a supplier investing alone.

Highlights

With the development of economy, the manufacturing industry has been developing rapidly. e rapid development of manufacturing industry provides abundant choice of products to humans, and it leads to many environmental problems such as resource depletion and environmental pollution
The green uncertainty factor is added into the environmental investment decision in a green supply chain
With the green uncertainty of intermediate components decreases and the green feasibility factor increases, the supplier will increase the greenness of intermediate components and increase the green investment, and the manufacturer will reduce the share of green costs

Summary

Introduction

With the development of economy, the manufacturing industry has been developing rapidly. e rapid development of manufacturing industry provides abundant choice of products to humans, and it leads to many environmental problems such as resource depletion and environmental pollution. E main purpose of this paper is to analyze the impact of uncertainty of green products on decision for environmental investment in supply chain. Liu and Xiao investigate the decisions on price and collection rate and reverse channel structure strategy of a dyadic closed-loop supply chain with corporate social responsibility and green consumers, within which the manufacturer and green consumers exhibit environmental responsibility behaviors [21]. Ghomi-Avili et al propose a robust bilevel model of the single-product multiperiod network design problem for a competitive green supply chain considering pricing and inventory decisions under uncertainty and disruption risks [34]. Some of these papers discuss coordination and decisionmaking of green supply chain. With the green uncertainty of intermediate components decreases and the green feasibility factor increases, the supplier will increase the greenness of intermediate components and increase the green investment, and the manufacturer will reduce the share of green costs

Modelling

Green Investment Decision-Making