Abstract
In this paper, the study of a sustainable production–inventory model with price and advertisement dependent on demand considering carbon emission reduction technology is investigated. The aim of this paper is to determine the optimal appropriate pricing, advertising, production, inventory, and capital investment decisions under various carbon emission policies to maximize the joint total profit of a multi-stage supply chain system. Various theoretical results and an algorithm are provided to verify and obtain the optimal solution of the problem. Further, the model is verified by numerical examples, and the robustness check of parameter variation is also analyzed. Finally, some management implications for decision makers are drawn from numerical examples. In summary, this study puts forward more realistic modeling hypothesis, which is beneficial to the academic research, and the research results can provide relevant decision makers with a model for managing a sustainable supply chain.
Highlights
With the negative impact of climate change on the environment, society, and even companies, sustainable development has become one of the most important issues that companies pay attention to
The amount of research on product-inventory models considering carbon emission issues has increased after the authors developed an economic order quantity (EOQ) or economic production quantity (EPQ) with sustainability considerations which can be divided into two categories, namely, carbon-related constraints and carbon price [1,10,11,12,13,14]
The main contribution of this study is that (1) the multistage issues of raw materials and finished products which is different from other previous research; (2) the co-investment in carbon emission reduction technology between the vendor and the buyer is considered in a continuous-time framework; and (3) investment, pricing, and advertising effectiveness are simultaneously taken into account in the proposed model
Summary
With the negative impact of climate change on the environment, society, and even companies, sustainable development has become one of the most important issues that companies pay attention to. Some scholars have found that companies can significantly reduce carbon emissions without significantly increasing cost by weakening inventory management or supply chain management [7]. From the supply chain system integration perspective, if supply chain members can jointly invest in carbon reduction technology, share the cost saving and increased benefits brought by carbon reduction, it will be conducive to the development of green products. Investment in the development of green products can effectively reduce the amount of carbon emissions, and contribute to help save energy (such as electricity). Based on the current consumer awareness of environmental protection, strengthening green advertising will more effectively increase demand. The primary objective is to simultaneously determine optimal pricing, advertising, production, replenishment, and investment decisions under the carbon taxes and carbon cap-and-trade policies. The remainder of this article is structured as follows: Section 2 discusses the review of earlier studies and compares the differences between this study and previous research to highlight research contributions; Section 3 displays the notations and assumptions in the proposed model; Section 4 presents the research models and empirical results; Section 5 discusses the effects of parameter changes, and in Section 6, conclusions, suggestions, and further works are presented
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