Uncertain green product supply chain with government intervention

Abstract

Green product supply chain management is increasingly becoming a new trend due to the growing awareness of environmental issues and the continuous development of industrial eco-processes. In this study, a two-echelon supply chain with government intervention involving a single manufacturer and a single retailer is examined. Due to the lack of actual data, the market size, price elasticity, demand function, and production cost are assumed to be unreliable variables. On the basis of various risk attitudes, the uncertain expected value, optimistic value, and mini–max chance constraint game theoretic models are developed. Equilibrium decisions for different planning models are derived. An analysis of equilibrium decisions and profits is conducted through numerical experiments examining the effects of confidence level, government intervention, green level, and price sensitivity. Based on the results of the data analysis, it appears that the manufacturer and retailer are able to reach different equilibrium decisions by adopting distinct risk attitudes. Furthermore, government intervention can facilitate the coordination of parameter-based decision-making and supply chain conflicts.