Sustainable supply chain coordination with greening and promotional effort dependent demand

Abstract

This paper studies green growth and coordination issues in a three-layer supply chain consisting of one manufacturer, one distributor and one retailer under cost sharing contract. We explore the impact of green initiatives taken by the manufacturer and the promotional efforts put by the distributor. We adopt game-theoretic approach to examine the impact of greening, advertising and consumer sensitivity towards green-channel. We propose a cost sharing contract between the members who bargain on the cost sharing parameter, and the significant contract benefits for the chain members. We study two different cost-sharing contracts, one between the manufacturer and the distributor, and another between the distributor and the retailer. The key contribution and objective of this paper are analysing the impact of promotional activities of a green supply chain, and investigating different strategies of cost sharing contracts with collaboration between channel partners and analysing information sharing on the decisions and profits of the chain members.