Abstract
Environmental sustainability has become a critical indicator in evaluations of the success and efficiency of supply chain management. In this study, we consider a two-echelon supply chain composed of two competing manufacturers, two retailers, and one third-party logistics firm. The first manufacturer produces a green product, while the second manufacturer produces a nongreen product. Each of the two retailers can sell only a green product, only a nongreen product, or both green and nongreen products. All products are initially stored by the third-party logistics firm and delivered to the retailers. This study investigates product pricing, the degree of greenness of the first manufacturer’s product, and carbon emission reduction as carried out by the third-party logistics firm. Using a three-stage Stackelberg game framework, we present the equilibrium strategy on pricing, the degree of greenness, and carbon emission reduction for five different distribution channel structures. One of our major findings is that competition between the two manufacturers has a positive influence on the profitability of the supply chain. We also find that it is desirable for each manufacturer to choose a cross-distribution channel for its products considering the sustainability and profitability of the supply chain.
Highlights
During human history, there has been no rapid global warming and environmental degradation comparable to that occurring today
To the best of the author’s knowledge, the only paper dealing with the greenness design of a product and 3PL firms’ efforts to reduce carbon emissions is that by Jamali and Rasti-Barzoki [43]. erefore, this study focuses on how the ecofriendliness of a manufacturer and efforts to reduce carbon emissions by a 3PL firm affect the profits of supply chain members under various distribution channel structures
We discussed the equilibrium decisions of pricing, the greenness degree, and carbon emission reduction efforts in a three-echelon supply chain consisting of two competing manufacturers, two retailers, and one third-party logistics firm
Summary
There has been no rapid global warming and environmental degradation comparable to that occurring today. Serious awareness of global environmental issues and the shift by consumers to environmentally friendly consumption patterns are demanding sustainable supply chain management strategies for many firms in supply chains. With regard to supply chain management, the logistics and transportation sector requires green and sustainable operations. Because trucks are among the main sources of pollution, many studies of the environmental impact of logistics have been driven by the increase in freight traffic. (i) How is competition in the market related to the degree of greenness of the products and the strategy to reduce carbon emissions?. (ii) How are the structures of distribution channels of green and nongreen products related to the profitability of the supply chain?. (iii) Are consumer preferences for green products related to profits in the supply chain?. Parametric analyses and various numerical experiments are conducted and described in Sections 5 and 6 to investigate the impacts of certain parameters on the equilibrium decisions. e last section provides a summary of the paper, presents the conclusion, and provides some directions for future research
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