Abstract
Green technology investment is an important factor that influences the sustainability and performance of the supply chain. In this paper, we use the game-theoretic approach, which is quite suitable to operation decision research, to model a supply chain consisting of one supplier and one retailer and discuss who should invest in green technology in a decentralized supply chain under demand uncertainty. An important result we found is that the retailer has a stronger investment motivation and higher investment efficiency compared to the supplier. The retailer also tends to invest in green technology himself when customers are not so sensitive to the product’s retail price. We analyze the supply chain sustainability, and find that high levels of green technology investments are not always necessarily good for environmental sustainability, it depends on the environmental impact’s sensitivity to green technology. Lastly, a joint investment mechanism is designed to induce the retailer to join in the green technology investment when he has no investment intention, and that realizes a Pareto improvement of the supply chain. Based on the results, we recommend designing more incentive mechanisms to induce the retailers to join in the green technology investment according to supply chain conditions.
Highlights
With the continuous deterioration of the global environment, people are paying more and more attention to products’ environmental properties [1,2]
Motivated by everything mentioned above, our research aims to address the following questions: (1) Who should invest in green technology in a decentralized supply chain under demand uncertainty? (2) What is the role of green technology investment motivation and investment efficiency of different supply-chain members? (3) Are high levels of green technology investments always better for the supply chain’s sustainability? To answer the above questions, we use the game-theoretic approach to analyze the green technology investment taken by different members in a decentralized supply chain and a centralized supply chain to address the above questions
We focus on “who invests in green technology investment in a decentralized supply chain under demand uncertainty” in the newsvendor context
Summary
With the continuous deterioration of the global environment, people are paying more and more attention to products’ environmental properties [1,2]. Who should invest in green technology in the decentralized supply chain under demand uncertainty becomes an important issue the supply chain faces. Motivated by everything mentioned above, our research aims to address the following questions: (1) Who should invest in green technology in a decentralized supply chain under demand uncertainty? (2) What is the role of green technology investment motivation and investment efficiency of different supply-chain members? To answer the above questions, we use the game-theoretic approach to analyze the green technology investment taken by different members in a decentralized supply chain and a centralized supply chain to address the above questions. The results of this paper will provide theoretical reference for supply chain members to make operational decisions in green technology investment, and the relevant departments managing the supply chain sustainability.
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