Optimal pricing and environmental improvement in a dual-channel hazardous waste disposal supply chain under cost sharing contract

Abstract

A dual-channel hazardous waste supply chain consisting of a disposal facility and a contractor is studied, where the customer demand is sensitive to price and environment impacts. Under the government’s emissions penalty, the disposal facility must invest in technology for hazardous waste disposal to reduce waste emissions. Firstly, under the cost-sharing contract, the cooperation model based on a disposal facility and a contractor is constructed, and the influence of cost-sharing ratio on supply chain system is discussed; Secondly, the Stackelberg game models are presented; Finally, the numerical experiments are conducted. The computational results show that the cost sharing contract can improve the total profit of the dual-channel supply chain. When one party is dominant, whether it is the disposal facility-Stackelberg or the contractor-Stackelberg, the profit of that party always increases as the cost sharing proportion increases. Moreover, for the environment and consumers, an increasing cost sharing proportion of the contractor can improve the disposal technology, and the emissions per unit of hazardous waste disposal have been consistently decreasing.