Abstract
Under the increasing pressure of global emission reduction, prefabricated buildings are becoming more and more popular. As prefabricated building manufacturers and assemblers are emerging in the market, how do they make decisions of pricing, ordering, and emission reduction? In this paper, game theory is used to make the decisions for the prefabricated building supply chain with flexible cap-and-trade and different power structures, i.e., using prefabricated building manufacturers as the leader, using the vertical Nash equilibrium, and using prefabricated building assemblers as the leader. The two-part tariff contract is designed to coordinate the supply chain and to improve the supply chain performance. Moreover, we discuss the influence of different power structures and the two-part tariff contract on the optimal decisions and profits. Finally, numerical analysis is used to verify the conclusions. This indicates that the supply chain leaders will gain a higher profit and that the power structure has a significant influence on the two-part tariff contract, which will result in an unfair distribution of profit. High carbon trading prices benefit carbon emission reduction. Consumer low-carbon awareness has a positive effect on carbon emission reduction and supply chain performance.
Highlights
Accepted: 24 September 2021Since the Kyoto Protocol in 1997, many countries have enacted restrictions on carbon emissions
We prove that the two-part tariff contract can Mathematics 2021, 9, 2426 achieve Pareto improvement of the prefabricated building supply chain, but the power structure will result in an unfair distribution of profit
Chen et al (2019) [20] investigated the cooperation of the manufacturer and retailer when investing in green R&D in different the power structures and found that the cooperation model led to a higher wholesale price, retail price, and demand, and achieved Pareto improvement or supply chain coordination through a two-part tariff contract that could be applied to different power structures
Summary
Since the Kyoto Protocol in 1997, many countries have enacted restrictions on carbon emissions. This paper establishes game models under different power structures and flexible cap-and-trade to study the prefabricated building supply chain decisions of pricing, ordering, and PBM’s carbon emission reduction. How do PBM and PBA make decisions about pricing, ordering, and PBM emission reduction under different power structures and flexible cap-and-trade?. How do carbon trading price, the consumer’s low-carbon sensitivity coefficient and the consumer’s price sensitivity coefficient affect the optimal decisions of pricing, ordering, PBM emission reduction, and supply chain members’ profit?. Motived by the prefabricated building development, we study the PBM investment in carbon emission reduction under different power structures. This paper contributes to the literature by designing the two-part tariff contract of PBM and PBA with a flexible cap-and-trade policy and power structures.
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