Reducing carbon emissions in humanitarian supply chain: the role of decision making and coordination

Abstract

In this study, we investigate the role of decision-making and coordination related to carbon reduction within humanitarian supply chain. Accordingly, a two-stage supply chain consisting of a single manufacturer and a single retailer has been designed, within which three strategies for carbon emission reduction have been considered, namely direct procurement of carbon emission right, investment in fixed carbon reduction targets, and investment in reducing carbon emissions per unit product. The game model under decentralized decision-making, centralized decision-making, and coordinative status has been established. The influences of both consumer carbon sensitivity coefficient and carbon trading price on investment decision based on carbon emission reduction within supply chains, as well as the optimal decision of supply chain operations, are all discussed in this paper. Our study shows that the choice of supply chain carbon reduction strategies depends on carbon trading price and fixed emission reduction target, both the wholesale price and selling price of products are positively correlated with carbon trading price, and both optimal production volume of supply chain and optimal expected profit of supply chain operations are negatively correlated with consumer carbon sensitivity coefficient. The price discount contract may realize coordination within a supply chain, but the value of discount price depends on respective negotiation ability.