Impact of cap-and-trade regulation on coordinating perishable products supply chain with cost learning

Abstract

<p style='text-indent:20px;'>This paper incorporates carbon emission regulation and cost learning effects to examine a manufacturer-retailer supply chain for deteriorating items over a multi-period planning horizon. We investigate their impacts on supply chain coordination under the assumption that the product demand is affected by the selling price, promotional effort and inventory level. We first propose two algorithms for determining optimal solutions of the centralized and decentralized models. We show that the decentralized system can be coordinated perfectly with a two-part tariff contract. Further, we study necessary conditions under which members of the supply chain can accept this contract. At last, we conduct numerical experiment to illustrate the obtained theoretical results in impact analysis and the robustness of the coordinated model.</p>