Supply chain decision-making of green products considering a retailer's fairness concerns under a pre-sale model

Abstract

Advancing the upgrade and promotion of green products can facilitate green supply chain transformations. Currently, manufacturers cooperate with retailers stationed on e-commerce platforms to promote green products through a pre-sale model. Thus, we propose a green product supply chain comprising one dominant manufacturer and one retailer, where the manufacturer can invest to improve a product's green level, and the retailer can make regular-sale promotional efforts. Combining the pre-sale model and fairness concerns of the retailer, three models using the Stackelberg game were demonstrated to analyze the impact of the pre-sale scale and the retailer's fairness concerns on the supply chain members' optimal decisions. The results indicate that an improvement in consumers' green sensitivity can lead to a reduction in promotional efforts and is not conducive to upgrading under the fairness concerns of the retailer. Additionally, increasing the pre-sale scale does not continuously alleviate the uneven profit distribution. Therefore, we propose a cost-sharing contract to achieve the goal of coordination and find that adopting the contract weakens the negative effects of fairness concerns. Interestingly, the influence of adopting a cost-sharing contract is more significant when the pre-sale scale is large, and it improves the profits of retailers more than those of manufacturers. A larger cost-sharing coefficient aggravates the negative effect of fairness concerns on the entire chain's profits. When members set a sensible cost-sharing coefficient, the contract is beneficial for all members of the entire chain and green supply chain transformation.