Two Products' Supply Strategy of Enterprise under the Mandatory Carbon Emissions Capacity

Abstract

In the production process, enterprises often have to face the changing market environment. To maximize their own profit, they need to work out flexible supply decisions, so the product and price have become the most important elements to be considered in the production decisions. This paper is based on the enterprises' views, studying the production of enterprises, when their price is variable, how to make the supply decisions of two products. When the relationship between supply and demand is flexible, the different circumstances of the relationship between supply, demand, and enterprises' production strategies are studied respectively to maximize their profits. Analysis of the impact of price changes and product changes on the enterprises' profits yielded the conclusion that when the price and production are both at the same time, it will be an obvious impact on the corporate profits, at that time, also existing an optimal combination that can maximize the enterprises' profits. Now, that greenhouse effects have become more and more obvious, countries around the world have to work out the corresponding energy-saving and emission reduction policies to relieve this situation. As the major emission sources of greenhouse gas emissions, enterprises must be more responsible. This paper also introduces the Mandatory Carbon Emissions Capacity policy, using monotonic of the profit function with random variables, to explore the impact of carbon emissions policy, trying solving the problems that when the enterprises face two productions in which both the production and price are uncertain, how should a reasonable decision be made in case of different supply and demand relationship under the Mandatory Carbon Emissions Capacity policy. Finally we found two different supply strategies under two relationships between supply and demand. The paper proves that the carbon emissions capacity policy can not only reduce carbon dioxide emissions, but also reduce the impact on enterprises' profits.