Joint decision on product greenness strategies and pricing in a dual-channel supply chain: A robust possibilistic approach

Abstract

Nowadays, by increasing the sensitivity of governments to the issue of the environment, green supply chain design has become very significant. This paper presents a mathematical model based on a dual-channel system for designing a green supply chain. The first sales channel is based on the traditional retail purchasing system, while in the second channel the customers purchase the products from the plants directly. In the proposed model, decisions on location, products transfer and pricing are determined. Furthermore, the decision on the kind of manufacturing technology in each plant to be established is considered as well. Any kind of technology leads to a specific level of the greenness of the products in each plant. A product with a higher green level has a lower greenhouse gas emission but higher costs. In order to encourage managers to produce green products, government subsidy policies are in place. Besides, because of the uncertain nature of some parameters, a robust possibilistic optimization approach has been used. As the proposed mixed integer nonlinear model is complicated to solve, an Invasive Weed Optimization Algorithm (IWO) is proposed to obtain efficient solutions. Due to the nonlinear type of the developed model and due to there is no benchmark available in the related literature to validate the results, Cultural Algorithm (CA) and Genetic Algorithm (GA) are utilized. The results indicate that IWO performs better than others.