Gaming strategies within a green supply chain considering consumers' concern about the greenness and conformance quality of products.

Abstract

With the growing demand for green development, providing green and conformance quality improved products for sustainable growth and industrial upgrading is essential. However, the related literature rarely considers the improvement of product conformance quality in green supply chain management. This paper incorporates both into a framework for addressing the problem. We analyze the optimal strategies of a manufacturer responsible for conformance quality of product and greenness improvement and a retailer responsible for product marketing in a supply chain under four contracts: full cooperation, price-only contract, two-part tariff, and marketing cost-sharing. The results show that full cooperation and two-part tariffs lead to the same and highest product quality, greenness, overall profit, and social welfare, but full cooperation is difficult to achieve in the supply chain. For the profit-maximizing manufacturer and retailer, the manufacturer most prefers two-part tariff contracts, while the retailer prefers marketing cost-sharing because both achieve the highest profit in the preferred contract. In addition, under the price-only contract, the conformance quality of product and greenness is the lowest, and the profit levels for manufacturers and retailers are the lowest. In all four cases, increased environment and quality awareness contribute to improved product greenness and conformance quality, leading to higher profits for the manufacturer and retailer and higher social welfare.