Green supply chain network design considering chain-to-chain competition on price and carbon emission

Abstract

In this paper, we study the competitive and sustainable supply chain network design problem. We consider the chain-to-chain competition between two supply chains. The problem is divided into two stages. The retail price and carbon emission equilibrium at the competition stage are studied. Then, the equilibrium results of the competition stage are substituted into the network design stage as constraints. To address the computational complexity of large-scale problems, a Benders decomposition algorithm is proposed. Through computational studies we find that (1) considering carbon emission competition in the supply chain lowers both the total optimized cost and carbon emission; (2) the carbon emissions of the total supply chain network increases with the probability of capacity satisfaction; (3) the proposed Benders decomposition algorithm outperforms CPLEX for large scale problems.