Cost-sharing Contract Research Articles

Coordination strategy and contract design of platform supply chain for large-scale sports events with low carbon preference.

The organization of sports events, while generating economic benefits, inevitably imposes significant environmental pressures. Conducting green and low-carbon sports events have become a global consensus. In addressing the carbon emissions and benefit coordination issues on the production end of infrastructure construction for large-scale sports events, we considers the significant role of digital platforms in the industry's low-carbon transformation and upgrade, and innovatively incorporates platforms as decision-making entities and investigates the equilibrium strategies for low-carbon cooperation under three different power structures: one led by the sports events materials supplier, one by the materials distributor, and one by the integrated service platform. Additionally, it designs related cost-sharing contracts. The findings suggest that: centralized decision-making is more conducive to aligning the interests of various entities within the sports events platform supply chain. Different power structures have distinct impacts on overall supply chain profits and carbon emissions. Specifically, the supply chain achieves the highest overall profit under the domination of the integrated service platform, while the lowest level of carbon reduction occurs under the domination of the materials distributor. These results provide strategic insights for the low-carbon development of sports events and the coordinated cooperation within platform supply chain.

Stochastic Differential Game of Sustainable Allocation Strategy for Idle Emergency Supplies in Post-Disaster Management

This study aims to explore allocation strategies for idle emergency supplies in a “demander–platform–supplier” supply chain system along with government regulation during the post-disaster recovery period. Allocation of emergency supplies is a complex task that encompasses resource allocation before and after disasters. It is essential to reduce losses in disaster-stricken areas and support development during post-disaster recovery. However, there is often an excessive supply of emergency materials and a mismatch between supply and demand sides in downstream supply chains, which may lead to severe waste and difficulties in recovering surplus materials. This paper takes idle emergency resource sharing level and corporate social responsibility goodwill as endogenous variables. The allocation approaches are dynamically evaluated by incorporating random elements that influence the endogenous variables. Three stochastic differential games are introduced to examine the interactions between the players. The centralized decision-making satisfies the consistency of overall and individual rationalities at any time in the emergency material allocation process, promoting the optimal sharing levels of emergency materials and overall profits. The decentralized decision-making with cost-sharing contracts achieves local optima and increases the dual marginal effect of the emergency industry chain. This paper incorporates the sharing economy into emergency management, showing how technology-driven sharing platforms can optimize resource utilization. The results suggest introducing cost-sharing contracts between demanders and suppliers can enhance collaboration and effort, leading to better resource allocation and increased efficiency. It contributes to sustainability by promoting efficient resource utilization through idle emergency resource sharing. By optimizing allocation strategies and enhancing corporate social responsibility, the study fosters the long-term viability and resilience of the supply chain system in post-disaster management.

Retailer involvement in eco-conscious consumer-oriented carbon footprint reduction

Retailer involvement and consumer eco-consciousness are two critical considerations for firms when designing comprehensive carbon footprint reduction (CFR) plans. This paper constructs a supply chain (SC) where one manufacturer and one retailer make CFR and pricing strategies in response to eco-conscious consumers. Eco-conscious consumers form a reference carbon footprint to assess the product's green level. To achieve SC coordination, a cost-sharing contract is introduced. Our results suggest that retailer involvement in CFR always benefits the environment, SC performance, consumer surplus, and social welfare. During CFR cooperation, the manufacturer strategically affects the retailer's CFR decision by adjusting the CFR level, impacting environmental and economic outcomes. Although higher CFR efficiency by the manufacturer can benefit the environment, SC performance, consumer surplus, and social welfare, a similar emphasis by the retailer may have adverse effects. Surprisingly, a lower reference carbon footprint for eco-conscious consumers may be worse for the environment, depending on the retailer's CFR efficiency. Furthermore, implementing a cost-sharing contract under the retailer's different CFR efficiency yields two distinct impacts: a multi-win situation or an incentive conflict. Extended studies are further examined to validate the robustness of these main results.

Dynamic Incentive Mechanism of Collaboration in Prefabricated Building Supply Chain Based on Differential Game

Supply chain collaboration is an important guarantee for improving the performance of prefabricated construction projects and exerting its advantages. The aim of this study was to explore the level and effect of supply chain collaboration under a no-cost-sharing contract, a cost-sharing contract, and a centralized decision-making contract. A dynamic incentive model of prefabricated building supply chain collaboration based on the differential game model was proposed. Considering the impact of BIM on collaboration, the BIM application level was also introduced into the incentive model. Through the comparative analysis of model solution results and numerical simulation, it was found that, in the centralized decision-making contract, the optimal collaborative effort and the optimal total revenue of enterprises in the prefabricated building supply chain were the largest; the optimal collaborative effort of enterprise in the prefabricated building supply chain reduced first and then tended to be stable; and the improvement of the BIM application level could promote collaboration in the prefabricated building supply chain. The results of this study are helpful for managers to select and formulate a reasonable collaboration incentive contract in the prefabricated building supply chain.

Integrated Pricing and Inventory Decisions for Product Quality-Driven Extended Warranty Services

Extended warranty services have become increasingly important for both manufacturers and retailers, offering avenues for new profit sources and growth opportunities. Focusing on the multiple effects of product quality, this study develops a two-period supply chain decision model to analyze the effects of product quality, pricing, and inventory management in the context of extended warranty services. Using a Stackelberg dynamic game model, this study examines the interaction between a manufacturer and a dominant retailer who provides extended warranties. The results indicate significant differences in optimal decisions between centralized and decentralized supply chains, especially concerning pricing and inventory control. Introducing a “quality cost-sharing” contract enhances product quality and improves coordination, leading to increased profits for both the manufacturer and the retailer. Numerical simulations confirm that the cost-sharing contract effectively balances product quality improvements with supply chain profitability.

Decision-making in low carbon supply chains: a blockchain-based lcsp perspective and a differential game model

Blockchain technology has reshaped how members of supply chains transfer information, effectively avoiding the phenomenon of information silos and helping to improve the emissions reduction performance and profit of each subject in the supply chain. It is now critical to understand how supply chain members can be encouraged to collaboratively invest in low-carbon service platforms based on blockchain technology to realise chain-wide systematic carbon reduction. In this regard, considering the time-dynamic characteristics of enterprise emissions reduction, this paper establishes a differential game model of collaborative emissions reduction in a low-carbon supply chain composed of a Stackelberg leader manufacturer and a supplier. We compare and analyse the four investment decision scenarios regarding whether the supplier and manufacturer invest in the blockchain low-carbon service platform under decentralised decision-making, as well as the equilibrium solutions of supply chain members under centralised decision-making scenarios by solving the Hamilton function. Finally, we introduce a bilateral cost-sharing contract to make the supply chain perfectly coordinated. We find that the significant unit return is an important incentive for supply chain members to take the lead in investing in a low carbon service platform (LCSP). In this regard, when only one member invests, the other one demonstrates free-riding behaviour. Under centralised decision-making, the supply chain can achieve Pareto optimality, and the bilateral cost-sharing contract can achieve perfect coordination of the supply chain, which is the best choice for the decision-makers of low-carbon supply chains. As the influence level of the LCSP gradually increases from small to large, the optimal decision-making of supply chain members gradually transitions from waiting for the right time to “hitchhike” to a strong willingness to cooperate. This study is of great reference value and practical significance for economic entities to improve profits, promote systematic carbon reduction in the whole chain and promote the sustainable development of low-carbon supply chains.

Low-carbon strategy analysis in a construction supply chain considering government subsidies and contract design

This study establishes a low-carbon construction supply chain (CSC) composed of a developer and a contractor. The developer invests in low-carbon promotion (LCP) to give consumers more accurate information about the project's low-carbon aspects. The contractor invests in low-carbon construction technology (LCT) with the intention of reducing carbon emissions. This paper explores the investment strategies and cooperative behaviors of developers and contractors from the perspective of government subsidies and further studies the conditions that affect the successful implementation of cost-sharing contracts between the developer and contractor. This study considers four decision-making scenarios: decentralized decision-making without government subsidies, decentralized decision-making with government subsidies, unilateral cost-sharing contract (UCC) with government subsidies, and bilateral cost-sharing contract (BCC) with government subsidies. The findings indicate that: (1) The contractor's LCT investment has a better optimization effect on CSC than the developer's LCP investment. (2) When only government subsidies are implemented, subsidizing contractors is more conducive to the optimization of CSC. When UCC and BCC are further introduced, subsidizing developers becomes more beneficial. Moreover, excessively high subsidy standards are not conducive to the sustainable development of CSC. (3) UCC and BCC both hold the potential for Pareto improvements within CSC, with success contingent upon specific conditions, and BCC tends to achieve better optimization than UCC. (4) The marginal profits of developers and contractors primarily drive the effectiveness of contracts. CSC's sustainability is jeopardized by cost-sharing ratios that are either excessively high or too low. This study provides a robust theoretical foundation for promoting low-carbon cooperation among members of CSC and formulating government subsidy policies.

Protecting labor rights: Contract design and coordination between brand firms and suppliers

This paper explores the design of a contract aimed at coordinating brand firms and their suppliers to collectively protect the suppliers’ labor rights. It finds that a unilateral cost-sharing contract can incentivize suppliers to protect labor rights, while improving the profits of both brand firms and their suppliers. However, such a contract fails to coordinate the supply chain because of an insufficient incentive for both involved parties. Two improved contracts of this contract can coordinate brands firms and their suppliers to improve their efforts to protect labor rights under certain conditions while failing to achieve coordination. Accordingly, this research proposes a bilateral cost- and revenue-sharing contract. The results indicate that with an appropriate revenue-sharing proportion, this contract effectively encourages brand firms and their suppliers to participate in protecting labor rights and coordinate the supply chain. In addition, an increase in the proportion of prosocial consumers incentivizes brand firms and their suppliers to improve labor rights. Nonetheless, consumers’ excessive reliance on brand goodwill to evaluate the total supply chain efforts to protect labor rights will reduce their efforts. Finally, as the impact of labor rights protection efforts on reference prices increases, it can stimulate brand companies and suppliers to increase investment in improving labor rights. At this high impact level, the reference price in the centralized model may surpass that in the unilateral cost-sharing contract. However, if supply chain members invest little effort to protect labor rights, the increase in this impact could reduce consumers’ reference price.

Research on the Mechanism of Collaborative Innovation in Green Technology among Supply Chain Enterprises Based on Cost Sharing and Market Competition

Supply chain green technology collaborative innovation is an important means for enterprises to improve the greenness of their products. This paper takes supply chain green technology innovation collaboration as the research object and constructs a stochastic differential game model, which not only provides reference for enterprises to choose the optimal type of technology innovation by combining with their own characteristics, but also provides a reference for their innovation decision-making in different market competition environments. The study shows the following: (1) in green product innovation, the formation of the cost-sharing contract is less affected by the intensity of competition in the green market when the market preference for greenness is relatively low. Therefore, government subsidies become an important tool to effectively guide the market mechanism to achieve the desired goal. As market competition intensifies, manufacturers’ incentives to suppliers will shift from reducing costs to increasing demand. (2) In green process innovation, when the intensity of green competition is low and suppliers’ process innovation efficiency is high, manufacturers should bear more costs; when the market preference for greenness is low, the market competition is intense, and the suppliers’ process innovation efficiency is low, the suppliers should bear more costs to help the manufacturers gain more market shares. (3) When retailers’ preference for greenness is relatively low, the government subsidy becomes an important tool to effectively guide the market mechanism to achieve the desired goal. (4) When the retailer’s green promotion performance is higher than the manufacturer’s, the manufacturer should bear more green promotion costs; conversely, the retailer should bear more green promotion costs. (5) Over time, the marginal increase in price over the marginal increase in greenness helps stabilise price volatility, considering consumer preferences. Conversely, it helps to increase the average value of prices.

Dual channel closed-loop supply chain coordination with exchange policy, sales efforts and green innovation under uncertain market

ABSTRACT This paper explores a dual-channel supply chain within an uncertain environment where a manufacturer produces a green product and a retailer makes sales efforts to attract a higher customer base. Moreover, we incorporate a reverse supply chain model in which the manufacturer retrieves end-of-used products from customers through a collection initiative. Simultaneously, the retailer gathers end-of-used products from customers by implementing an exchange policy facilitated through a coupon applied to the product’s selling price. Then, we explore centralized, manufacturer Stackelberg, option contracts and cost-sharing contracts strategies to maximize supply chain profits under various circumstances. Subsequently, a numerical example is undertaken to showcase the utility of the models and explore sensitivity that examines how different parameters impact the supply chain’s profit. Findings suggest that the supply chain members will be profitable if they engage in the option contract model under a suitable value of the option price and exercise price.

Pricing strategies for shared manufacturing platform considering cooperative advertising based on differential game.

Shared manufacturing is a new business form that focuses on all aspects of production and manufacturing, mainly relying on the shared manufacturing platform to achieve the optimal allocation of idle resources. For enterprises, in the process of deciding to lease idle resources, the pricing and advertising investment efficiency of the shared manufacturing platform is a valuable research issue. The shared manufacturing model in this paper consists of one manufacturer and one shared manufacturing platform, which will invest in cooperative advertising while the shared manufacturing process is completed. The cooperative advertising involves four models: the traditional cooperation model, the cost-sharing contract model, the revenue-sharing contract model, and the bilateral cost-sharing contract model. We investigate the impact of some key parameters on the prices and profits of the manufacturer and the shared manufacturing platform based on the differential game. The numerical examples demonstrate the viability of the model. Finally, we provide suggestions based on the decision-making of the manufacturer and the shared manufacturing platform under different cooperative advertising models.

Revenue-sharing vs. cost-sharing contracts in motivating supplier corporate social responsibility

PurposeTo motivate the supplier to exert more corporate social responsibility (CSR) effort, the manufacturer offers it either a revenue sharing contract or a cost sharing contract. We study the contract choice of the manufacturer.Design/methodology/approachWe develop game theoretic models to investigate the manufacturer’s optimal contract choice and examine whether there is a conflict of contract preference between the manufacturer and the supplier.FindingsFirst, the revenue sharing contract has more strict conditions regarding the unit cost of the supplier’s CSR effort and the manufacturer’s retail price. Second, the cost sharing contract enables the manufacturer to achieve a “win-win” performance in terms of both profitability and CSR effort. Finally, the supplier prefers the cost sharing contract when the manufacturer’s price is low, otherwise, it prefers the revenue sharing contract.Originality/valueDiffering from the papers on CSR, our paper focuses on the supplier CSR management problem, and analyzes the optimal contract to motivate the supplier to exert more CSR effort.

Impacts of dual carbon emission reduction technology and technology spillovers of deterioration reduction on supply chain system's performances considering government incentives and contract design

Investments in carbon emission reduction and deterioration reduction are important aspects for the firms to construct a low-carbon supply chain systems of deteriorating products with the increasing preferences of customers for environmentally friendly and fresh products. In this study we develop a two-echelon supply chain system consists of one manufacturer and one retailer. The manufacturer implements dual carbon emission reduction technology to strengthen the carbon emission reduction efficiency under cap-and-trade regulation and both manufacturer and the retailer invest in deterioration reduction technology to reduce the deterioration and increase the stock level of the fresh items. To increase the demand, the retailer takes the responsibility of promoting the low-carbon and fresh products among the customers. Deterioration reduction technology spills over from the manufacturer to the retailer. Then a differential game model is formulated and the equilibrium strategies are analysed by Stackelberg differential game approach in long term scenario. Numerical analysis has been done to analyse the theoretical results more rigorously by MATLAB software and sensitivity of some major parameters on the demand and profits of the manufacturer and the retailer have also been done to obtain some managerial insights. The impacts of implementing dual carbon emissions reduction technology and the effects technology spillovers are discussed. The results show that when the manufacturer invests in dual carbon emission reduction technology over single reduction technology, it increases the emission reduction level and hence the environmental performance and also the demand and hence economic profits of the both the supply chain members. If the deterioration reduction technology spills over from the manufacturer to retailer, it increases the profit of the manufacturer but the retailer will be beneficial when his/her marginal profit will be high. In addition, we have incorporated government subsidy on manufacturer's emission reduction investment and a cost-sharing contract on the promotional effort of the retailer in our work and then found that joint impacts of them on the supply chain system. We have shown that these two incentives provide the pareto improved solution for the supply chain system and take the supply chain members to a win-win situation as economically and environmentally. The discussions of the results of this study can be beneficial for the industries which produced deteriorating products and emits high carbon during the production process in terms of taking optimal decisions. It also gives a lesson to the government how to inspired the practitioners towards developing a sustainable system.

Implications of risk-averse manufacturer on coordination of green supply chain with mixed carbon policies

PurposeThis paper intends to address the decision-making and coordination of green supply chain (GSC) considering risk-averse manufacturers under mixed carbon policy.Design/methodology/approachThis paper focuses on a GSC consisting of a manufacturer and a retailer, in which the manufacturer is risk-averse (R-A). This paper employs Stackelberg game theory and mean variance analysis to assess the pricing decision-making process under various scenarios. Furthermore, cost-sharing contracts are introduced to coordinate the GSC.FindingsThe research results suggest that the green level of the product and the profit of the GSC under a centralized scenario are higher than those under a decentralized scenario, while the retail price is lower. Under the decentralized scenario, the green level of product, wholesale price and manufacturer’s profit in the R-A scenario are lower than the values in the risk-neutrality scenario, while retailer's profit is higher. In addition, when a cost-sharing contract is utilized for coordination in the GSC, it can lead to Pareto improvement, regardless of whether the manufacturer makes risk-neutrality or R-A decisions.Originality/valueThis research provides a deeper understanding of GSC decision-making and coordination strategy under mixed carbon policy with consideration of R-A from a theoretical perspective and provides decision support for enterprises to choose strategies in practice.

Toward Sustainable Construction: Optimizing Carbon Emission Reduction in the Building Supply Chain through Game-Theoretic Strategies, Government Subsidies, and Cost-Sharing Contract

Toward Sustainable Construction: Optimizing Carbon Emission Reduction in the Building Supply Chain through Game-Theoretic Strategies, Government Subsidies, and Cost-Sharing Contract

Coordinated emission reduction strategy of water pollution and carbon emissions in the South-to-North Water Diversion Project based on a differential game model

ABSTRACT This study investigates the green development of the South-to-North Water Diversion Project (SNWDP) by exploring the synergistic reduction of water pollution and carbon emissions. Firstly, a differential game model is constructed to reduce pollution and carbon in the water supply chain. Secondly, the emission reduction strategies of water source and receiving areas under centralized and decentralized decision models are compared and analyzed and a cost-sharing contract is designed to coordinate the supply chain. Finally, numerical analysis is used to compare and analyze the important parameters to draw conclusions. The results show that: (1) Collaboration between water source and receiving areas influences emission reduction efforts, with the highest achieved under the centralized model. (2) The cost-sharing contract improves efforts and addresses ‘free-riding’ in the decentralized model. (3) The SNWDP can achieve a win-win situation in terms of both environmental and economic benefits by promoting the synergy of pollution reduction and carbon reduction.

A Green Supply Chain with Sales Effort under a Cost-Sharing Contract

Due to social and psychological factors, the COVID-19 pandemic has impacted international trade, dampened consumption globally, and resulted in conservative investment and spending. To stimulate economic recovery while promoting the establishment of a positive consumption awareness among people, enterprises endeavor to enhance competitiveness and expand market share through various means, such as advertising and discounting. With more attention paid to environmentally friendly products, there are greater challenges encountered by green supply chain management. In this study, a green supply chain network problem is analyzed, involving a manufacturer and a retailer. In addition to the construction of centralized and decentralized decision models, two cost-sharing contracts are adopted to reduce promotion costs for the retailer and improve the level of greenery in products. With the help of game theory, equilibrium decisions can be made by solving the models. According to the results of numerical experiment, cost-sharing contracts can effectively improve the level of greenery in products and the profitability of the supply chain, despite the inability to achieve a win–win situation.

Reducing carbon emissions in prefabricated buildings supply chains: a focus on component manufacturing processes.

The construction sector accounts for 23% of emissions from global economic activity, with China responsible for nearly 41%. Although China has vigorously promoted the development of prefabricated buildings (PBS) in pursuit of cleaner production, the carbon emissions from prefabricated component factories (PCF) should not be underestimated. So, the focus of this research was on how to promote the decarbonization of PCF. Based on the carbon trading market mechanism, the carbon emissions trading tax and revenue tax collection, the authors established a differential game model consisting of the local government and the PCF, studied the equilibrium solutions under different decision models, and analyzed the roles of the two tax systems, carbon trading revenue, and market preferences. The results are as follows: (1) The PCF's low-carbon technology (LCT) innovation efforts can be directly affected by the carbon price, component price, and tax rate and indirectly affected by influencing the local government's efforts. Besides, the local government and the PCF strategies can be changed through the central government's regulation of carbon prices and tax rates. (2) PCF should set reasonable prices for components, improving economic efficiency and the LCT stocks. (3) Cost-sharing contracts can encourage PCF to increase their LCT innovation, which is conducive to increasing the optimal benefits of the PCF. (4) The local government cannot be motivated by cost-sharing contracts. They can increase their optimal benefits only if the cost-sharing coefficient is below a threshold or if the environmental benefits from low-carbon production are above a specific value.

Sustainable automotive supply chain in the presence of disruption and government intervention

This paper aims to develop and simulate a green automotive supply chain model (ASC) consisting of one supplier, one manufacturer, and two types of products (green and non-green) under disruption risks (DRs). The greening effort (i.e., electric vehicle production) is considered for both the supplier and the manufacturer. In our modeling, we include the local government intervention (GI) and their incentivization of manufacturers to produce greener products. Moreover, the effectiveness of centralized versus decentralized supply chain integration strategies in coping with disruption consequences was explored. A mathematical pricing model based on game theory is designed to maximize the total profit for both integrated and decentralized systems. The model examines the effects of the greening effort on the supply chain (SC) members with eight disruption scenarios, including Extra Production and Surplus Inventory. Simulating numerical examples reveals that the Extra Production type of disruption increase the profitability in different scenarios. Conversely, the Surplus Inventory disruption reduces profitability. Moreover, a channel coordination through cost sharing contract in the presence of disruption sharing was developed. GI and the cost-sharing contract increase the SC profit. The managerial implications of our findings are also discussed in this paper.

Comparing three contract types to optimize profits in service firm – digital service platform relationships

PurposeThe importance of service firms cooperating with digital platforms is widely acknowledged. The authors study three contractual relationships (fixed-cost, cost-sharing, and profit-sharing) between service firms (specifically hotels) and digital platforms in a highly fragmented service supply chain to examine which of these contract types optimizes profits.Design/methodology/approachThe authors extend prior models analyzing the optimal expected total profit from the travel service firm (hotel)–digital platform relationship, providing new insights into each contract type’s ability to coordinate decentralized systems and optimize profits for both parties.FindingsThis study finds that fixed cost contracts cannot coordinate the decentralized system. Cost-sharing contracts can coordinate the decentralized system but only allow one channel profit split. In contrast, profit-sharing contracts may not always perfectly coordinate the decentralized system but support alternative profit allocations. Practically, both profit-sharing and cost-sharing contracts are preferable to fixed-cost contracts.Practical implicationsThe paper includes implications for travel service firm managers to consider when structuring contracts with digital platforms to focus on profit optimization. Profit-sharing contracts are most preferable when cost and revenue data are fully shared between parties, while cost-sharing contracts are preferable over fixed-cost contracts.Originality/valueThis study extends prior investigations into the utility of different contract types on the optimal profit of a travel service firm (hotel)-digital platform provider relationship. The research fills a gap in the literature concerning the contracts used in these relationship types.