Abstract
With the increasing public awareness of environmental issues, green production has become an important issue for supply chain management. This study proposes an analytical model to investigate the dual-channel green supply chain decisions of a retailer and a competitive supplier; the latter suffers from unreliable production yield. The retailer’s environmental responsibility is considered as a two-echelon supply chain in which the retailer promotes the green product in their marketplace through green marketing. This problem is analyzed and modeled under three available channel strategies, considered in the order in which channel selections are made: a single online channel strategy, a single retail channel strategy, and a dual-channel strategy. The results show that the wholesale price of the manufacturer and the green-marketing effect of the retailer increase with the improvement in the level of the green production technology. Interestingly, the result reveals that a retailer’s expected profit is unimodal in the production technology level under the dual-channel strategy, which suggests that the retailer may not be incentivized to encourage the manufacturer to improve its production technology once a threshold has been reached. Further, we develop the channel selection: the retailer is strictly better off in the single retail channel scenario than that in the dual-channel scenario; however, while the unreliable supplier is better off in the single online channel scenario than that in the single retail channel scenario, its best option is still the dual-channel strategy. Additionally, numerical results illustrate that the expected profits of supply chain parties decrease with the improvement in customer acceptance of the online channel.
Highlights
Green production has gained increasing public attention in recent years [1]
We will fill the research gap in the literature related to the strategic analysis of dual-channel green supply chains under the condition of yield uncertainty
Motivated by the above analysis, this paper focuses on a dual-channel green supply chain consisting of one competitive manufacturer and one retailer
Summary
Green production has gained increasing public attention in recent years [1]. At present, many enterprises have realized the application of green supply chains by strengthening their green design ability and improving their green management level. In a traditional supply chain model, retailers buy products from manufacturers and sell them to consumers. Many manufacturers, such as Coca-Cola, GREE, and Nike, sell their green products through both online and offline channels; this is known as a dual-channel supply chain [13]. These activities create competition between manufacturers and retailers. To address the concerns raised above, in this paper, we consider a dual-channel green supply chain consisting of a competitive manufacturer and a retailer. The partial proofs of the paper are provided in the Appendix A
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