Cost-sharing Contract Research Articles

Optimizing mechanisms for promoting low-carbon manufacturing industries towards carbon neutrality

Many governments have implemented subsidy policies to promote low-carbon manufacturing for achieving carbon neutrality. Whereas carrying out an appropriate subsidy policy and subsidy rate is challenging when the supply chain members collaborate on low carbon technologies. Therefore, this research constructs a game model that is comprised of a government, a low carbon manufacturer and a retailer. The government can subsidize the manufacturer's production or innovation costs. The retailer can collaborate with manufacturer through a revenue-sharing contract or cost-sharing contract. This research investigates the interaction between the government subsidies and supply chain collaborative innovation. The impact of government subsidies and supply chain collaborative innovation on the carbon emission reduction and economic performance is further studied. The results reveal that the supply chain collaborative innovation is a factor that should be taken into account when the government decides the subsidy mode and subsidy rate. Under certain conditions, the combinations of subsidy policies and collaboration contracts can simultaneously achieve the highest economic performance and carbon emission reduction level. This research suggests that the government should timely adjust the subsidy rate in accordance with the collaborative innovation modes of the supply chain. The government should investigate the status of low carbon technology innovation before choosing a subsidy mode. Through choosing the suitable subsidy mode, the government can bear more fruit in reducing carbon emissions, thereby benefiting the carbon neutrality.

Research on Supply Chain Coordination Decision Model Based on Green Technology

The joint green R&D of suppliers and manufacturers and the green marketing of manufacturers directly affect the degree of green products. Based on this, this paper establishes a coordination decision-making model of green innovation on the basis of cost-sharing contracts to stimulate supply chain partnerships, and studies the green R&D efforts and green marketing investment decisions of the secondary supply chain composed of a single supplier and a single manufacturer under different leadership scenarios, as well as the relationship between the green R&D decisions of the supply chain and the green marketing decisions of the manufacturer. The influence of green innovation capability on enterprise profit, product greenness and marketing investment is analyzed by numerical simulation. The results show that if an enterprise increases the unit cost coefficient of green innovation, it will reduce the green input of all members of the supply chain; When consumers’ green preference is low, manufacturers will tend to increase investment in green marketing; Cost-sharing contracts can promote the overall green degree of products. The research conclusion can provide reference value for green supply chain management decision-making.

Coordinating a dual-channel supply chain with pricing and extended warranty strategies under demand substitution effects

With technology innovation and market complexity, this paper examines a dual-channel supply chain with one manufacturer and one retailer. A manufacturer performs the encroachment by selling products through offline retail and direct online channels. It also provides an extended warranty service with the product sold in both channels. This study identifies the best pricing and extended warranty strategies as decision variables to maximize profits for the dual-channel supply chain under the demand substitution effect. Despite the centralized scenario, a decision-making model in the decentralized scenario is also developed using Stackelberg’s game to determine optimal decision variables. The results demonstrate that the centralized scenario consistently outperforms the decentralized scenario. Thus, coordination contracts are proposed considering the profit structure, revenue-sharing and cost-sharing contracts to coordinate and promote a win-win situation for supply chain members. Furthermore, demand substitution effects are investigated for channel parameters represented in the initial market size, price sensitivity coefficient, and warranty length sensitivity coefficient on optimal decision variables. From the sensitivity analysis, these parameters have a different substitution effect on the optimal decision in each channel. The price and extended warranty length offered in a dual channel positively correlate with the market size and warranty length sensitivity coefficient of the corresponding channel. However, they negatively correlate with the price sensitivity coefficient. Accordingly, a similar situation occurs for the profit of each channel. Last, the discussion supports the theoretical results and generates managerial insights for practical decision-making

Role of trust-building in online recycling platforms

Many studies have addressed the research questions in online platforms and the collection of waste electric and electronic equipment. However, they may ignore the effect of trust-building in the online platform and how trust affects the optimal strategy in the recycling platform. Consumers must consider the price and credibility in the product recycling process due to the differentiated prices for the same products set by different online platforms. This work studies the profit of recyclers and platforms with a degree of trust-building in the reverse logistics system considering the following scenarios: online recycling platform builds trust or not under centralized and decentralized models. The results show that trust-building can effectively make more revenue for the system of the online recycling platform with enhanced demand if the cost of the trust-building construction is relatively low, especially in the centralized model. The revenue-sharing contract is more profitable than the cost-sharing contract but fails to achieve optimization in the integrated setting. We find a new decision support tool for optimal strategies under different decision-making models. This work helps the recycling platform improve mechanism design and make optimal decisions considering trust-building.

Fuel consumption-reduction investment decisions and coordination contracts in fuel vehicle supply chains: A dynamic analysis

The share of carbon emissions from road transport is as high as 14% of global carbon emissions; fuel vehicles account for a significant part of these emissions. Therefore, there is a long way to reduce fuel consumption in fuel vehicles. We consider the government’s choice of two policies, Vehicle Carbon Emission Regulation (VCER) and Dual Credit Policy (DCP), to regulate the fuel vehicle supply chain and construct a Stackelberg differential game model for fuel consumption-reduction investment decision and operation coordination in a fuel vehicle supply chain consisting of one supplier and one manufacturer. Furthermore, we analyze the supply chain’s equilibrium strategies under centralized and decentralized decision scenarios. Finally, design a bilateral sharing contract to coordinate the supply chain and verify the theoretical analysis by numerical simulation. The results show that the DCP has a stronger incentive for fuel consumption reduction investment than the VCER; the supplier’s profit increases as the severity of the two policies increases, but the change in the manufacturer’s profit is not consistent under the two policies, where the increase in the penalty rate under the VCER decreases the manufacturer’s profit. However, it falls and then rises with tighter fuel consumption standards under the DCP. At the same time, the two-way cost-sharing contracts can encourage more fuel consumption reduction investments while increasing the profits of supply chain members, which is a Pareto improvement for the ecosystem and the supply chain parties.

Data-Driven Sustainable Supply Chain Decision Making in the Presence of Low Carbon Awareness

Low-carbon production is a vital solution for many environmental problems, as is consumers’ consciousness about carbon playing a more important role and ultimately passing upstream. Supply chains are eager to seek sustainable development via appropriate decision making with data-driven methods. Consistent with this aim, we investigated decisions toward lower carbon efforts and prices in a two-echelon supply chain via a game theoretical approach. The decision-making scenarios of decentralized, centralized, and cost-sharing contracts were investigated and compared. The results show that the level of improvement in environmental performance is positively correlated with the degree of cooperation between partners. Cooperation between partners would be even more significant with an increase in consumers’ low carbon awareness. Furthermore, cost-sharing contracts improve the performance of the entire supply chain compared with decentralized cases. Finally, we implemented numerical experiments to verify the modeling results. Therefore, this study provides theoretical support toward sustainable operations for supply chains concerning low carbon awareness.

Analyzing the development of competition and cooperation among ocean carriers considering the impact of carbon tax policy

Due to emission reduction pressure and supply chain changes, this paper analyzes the development trend of the marine supply chain based on the competition and cooperation incentives of carriers, considering the impact of the government’s carbon tax policy. We consider multi-stage Stackelberg games with different power structures consisting of a government, hub port, and two carriers. Equilibrium solutions for different power structures show that carriers tend to build alliance and compete with the port for leadership. Higher bargaining power is the dominant choice for all companies, and neither the port nor carrier alliance accepts the other as the leader. Thus, they compromise on equal bargaining. To resolve the conflicting interests of stakeholders, we examine the reasons for revenue-sharing and cost-sharing contracts that cannot coordinate the marine supply chain, and redesign the subsidy and revenue-sharing contracts. Higher subsidies and revenue-sharing proportions can make carriers give up competing for leadership, or even forming an alliance. The contract provides a new solution for companies’ strategic decision-making beyond equal bargaining. Numerical analyses suggest that although the contract weakens the effect of the carbon tax, promoting deeper cooperation between companies is a better option for the government. Finally, we verify the reasons for the failure of the carbon tax policy after the government failed to consider the market environment, and summarize the development direction of the marine supply chain under a reasonable carbon tax to provide management insights for stakeholders. Further, the model is extended to prove the validity and robustness of recommendations to the government and companies. New incentives are provided for companies’ integrates cooperation.

Research on decision-making of water diversion supply chain considering both social welfare and water quality utility

When water diversion projects become important part of the water network around the world, the effective operation and management of the projects play important roles in giving full play to the optimal allocation of water resources. For the operation and management of water transfer, the decision-making of water supply chain under the scenario of economic benefit, producer surplus, and water quality utility should be considered simultaneously. According to the idea of supply chain, this paper regards water transfer operation management as a water supply chain composed of water transfer companies, water supply companies, and consumers. From the perspective of social welfare and water quality utility, a comprehensive optimization and coordination decision model for water transfer is proposed. Taking the South-to-North Water Diversion Project as the research object, the cost-sharing contract is designed, and the Stackelberg game method is used to optimize the decision-making and coordination of the water supply chain. The results show that when the concern coefficient and the cost-sharing ratio are evaluated within a given feasible value region, the profits of both the water transfer company and the water supply company can be improved. The feasible value interval of the concern coefficient decreases with the increase in the cost-bearing proportion. When the concern coefficient increases, the profit of the water transfer company decreases, while profit of the water supply company, water quality, consumer surplus, water quality utility, and utility of the water transfer company increase gradually. The results provide valuable references for water transfer decision-making.

Strategies choice for blockchain construction and coordination in vaccine supply chain

Vaccine safety management is a top priority of vaccine supply chain (VSC) management. Faced with the increasingly serious vaccine safety problems, blockchain technology is regarded as an effective solution strategy. However, from the perspective of the supply chain operations and consumers, how to carry out blockchain construction is an issue that needs to be discussed. Considering the reality that vaccine manufacturers and vaccination units are implementing blockchain construction, we construct a VSC game model consisting of a vaccine manufacturer and a vaccination unit, analyze the conditions for applying blockchain technology in the VSC, and discuss who undertakes the blockchain construction between the vaccine manufacturer and the vaccination unit, which is more beneficial to the VSC and consumers. We further study the coordination of blockchain-based vaccine supply chain. The results show that, from the perspective of enterprises and consumers, blockchain technology will be adopted only when certain conditions are met. Compared with the vaccination unit, the blockchain construction undertaken by the vaccine manufacturer is more beneficial to the VSC and consumers. The vaccine manufacturer and the vaccination unit jointly undertake the blockchain construction, that is, sign a cost-sharing contract, which can improve the performance of the VSC, but cannot make the total profit reach the optimal level. When certain conditions are met, the two-part tariff contract can realize the blockchain-based VSC coordination.

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

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.

Offering custom products using a C2M model: Collaborating with an E-commerce platform

The e-commerce platform-driven Customer-to-Manufacturer (C2M) strategy is an emerging business model in which the e-commerce platform collects customer preference data and shares this information with manufacturers to facilitate product customization. This model has not been explored in the literature. We examine, from both the platform's and the manufacturer's perspectives, how to effectively offer custom products using the C2M approach. We find that offering custom products is not optimal when the consumers' fit sensitivity (to deviations from their ideal product) is low. When fit sensitivity is medium, offering custom products partially is an optimal strategy. When fit sensitivity is high, offering custom products fully is an optimal strategy. We show that consumers covered in the customization scope receive a greater surplus than customers who buy standard products. Surprisingly, the consumer surplus for the former group decreases with C2M while it remains unchanged for the latter group even though the product price increases. To mitigate the inefficiency arising in a decentralized channel compared to a centralized channel, we propose two types of mechanisms: a commission plus cost-sharing contract and bargaining. These mechanisms facilitate collaboration between the e-commerce platform and the manufacturer and achieve coordination in the supply chain. We extend the model in several ways to verify robustness. Our findings offer managerial insights for e-commerce platforms and manufacturers considering the implementation of the innovative C2M model.

Dynamic decision and its complex dynamics analysis of low-carbon supply chain considering risk-aversion under carbon tax policy

This study establishes a low-carbon supply chain game model under the centralized decision situation and the decentralized decision situation considering the manufacturer risk-aversion behavior, and discusses the influence of the manufacturer risk-aversion behavior on the optimal decision, profit, coordination, and complex dynamics of the supply chain. We find that comparing with the risk-neutral decentralized decision, the increase of manufacturer’s risk tolerance attitude can narrow the gap between the supply chain profit and the centralized decision, but it will further reduce the carbon emission reduction level. The increase of risk tolerance of the manufacturer and carbon tax will narrow the stable region of the system. Under this situation, the manufacturer should carefully adjust parameters to prevent the system from losing stability, especially the adjustment parameters for carbon emission reduction level. When the system is in a chaotic state, the increase of carbon tax rate makes the system show more complex dynamic characteristics. Under the chaotic state, it is difficult for the manufacturer to make correct price decision and carbon emission reduction strategy for the next period, which damages its profit, but increases the profit of the retailer and the supply chain. Finally, the carbon emission reduction cost-sharing contract is proposed to improve the carbon emission reduction level and the supply chain efficiency, achieving Pareto improvement. The stability region of the system is larger than that in the centralized decision situation, but the increase of the cost sharing coefficient will reduce the stability of the system in the decentralized decision-making situation.

Closed-Loop Supply Chain Decision-Making and Coordination Considering Fairness Concerns under Carbon Neutral Rewards and Punishments

The cheap price of carbon sink trading in certification emission reduction (CER) makes it more popular than the carbon emission allowance (CEA); trading in carbon-neutral, enterprises are more inclined to purchase carbon sinks to achieve their own carbon neutrality goals and promote decarbonization of the whole chain. Companies urgently need to figure out how to achieve carbon neutrality with government rewards and punishments. Moreover, as an important factor affecting the effectiveness of supply chain, it is particularly important to study how to coordinate fairness concerns of such objects. Therefore, a centralized and two-stage Stackelberg game model of a closed-loop supply chain (CLSC) of one manufacturer and one retailer is constructed, and the cost-sharing contract, revenue-sharing contract, and cost–revenue-sharing contract are used to coordinate it, taking into account the fairness concerns of downstream enterprises while pursuing carbon neutrality, ensuring the overall benefits of the supply chain, and considering the impact of government subsidies and rewards and punishments on the carbon neutrality of the supply chain. Research shows that (1) compared with the other two contracts, the cost–revenue-sharing contract performs better and can effectively achieve the Pareto optimum; (2) the cost-sharing contract performs better in accomplishing the carbon neutrality of the CLSC; (3) excessively high carbon sink prices are not only detrimental to enterprise efficiency, but also to the realization of carbon neutrality goal; and (4) higher supply chain utility is pursued by enterprises when the unit reward and punishment are not great enough; otherwise, carbon neutrality is pursued. The research results can not only provide decision support for the product pricing, carbon sink reserve and contract design of CLSC enterprises under the goal of carbon neutrality, but can also provide a reference for the setting of government subsidies and rewards and punishment.

Research on differential game strategy of debt restructuring supported by government.

This paper studies the debt restructuring equilibrium decision problem composed of creditors and debt enterprises with the participation of the government and asset management companies. With the differential game, the dynamic optimization models of debt restructuring under three situations: centralized decision-making, decentralized decision-making, and Stackelberg game after introducing cost-sharing contract are constructed, respectively. The optimal equilibrium strategy of debt restructuring, the optimal trajectory of debt restructuring synergy, and the optimal profit under three decision-making situations are investigated and compared. It is found that the synergy effect and total profit of debt restructuring are the highest under centralized decision-making, and the Stackelberg game is superior to decentralized decision-making, which shows that the cost-sharing contract can achieve the coordination of overall interests, improve the debt restructuring environment, and promote the debt restructuring process. Finally, the sensitivity analysis of relevant parameters is carried out through an example, which verifies the effectiveness of the conclusion and provides the scientific basis for the government and asset management companies to participate in debt restructuring successfully.

Fresh keeping decision and coordination of fresh agricultural products supply chain under carbon cap-and-trade.

Considering the carbon emissions caused by the fresh-keeping of fresh agricultural products, this paper studied the rules of fresh-keeping decision-making in the two-echelon fresh agricultural product supply chain led by suppliers under the carbon cap-and-trade policy. In addition, we designed two contracts, cost-sharing contract and two-part pricing contract, to coordinate the supplier's fresh-keeping decision and the supply chain's revenue. The results show that: whether the carbon cap-and-trade policy is implemented or not, the higher the consumer's preference for freshness and the lower the price sensitivity coefficient of consumers, the more favorable it is for suppliers to improve their fresh-keeping efforts. Under the implementation of carbon cap-and-trade policy, suppliers' fresh-keeping efforts are only related to the carbon transaction price, not the carbon cap; the higher the carbon transaction price, the less the supplier's fresh-keeping efforts, but the more the supplier's income; the smaller the cost coefficient of carbon emission reduction and the larger the coefficient of carbon emission reduction, the more favorable it is for suppliers to increase their fresh-keeping efforts; both cost-sharing contract and two-part pricing contract can coordinate the supply chain of fresh agricultural products, but they have different application scope and coordination effect. These conclusions are of great significance to the operation and management of fresh agricultural products suppliers, the improvement of consumers' quality of life and the protection of ecological environment under carbon cap-and-trade.

Improving the effectiveness of watershed environmental management—dynamic coordination through government pollution control and resident participation

To improve the effectiveness of envir onmental management of watersheds and improve the environmental management mechanism of cross-administrative watersheds, we develop a neoliberal framework for action using incentives, examine the cooperative strategies of local governments in watershed treatment and people-oriented environmental protection under central government subsidies, and analyze the cost effectiveness of multiple strategies in a dynamic perspective, and we have the following important findings: (1) Compared to vertical ecological compensation, the introduction of horizontal cost-sharing contracts is more effective in enhancing inter-local cooperative environmental governance. (2) When the marginal benefit of the downstream local government is greater than half of the upstream marginal benefit, the upstream local government's pollution control investment and the effect of pollution control are improved, and the Pareto improvement of the environmental governance benefit of the watershed is realized, i.e., the cost-sharing contract driven by the downstream can achieve a win-win situation for both environmental and government governance benefits. (3) When the marginal benefit of downstream environmental advocacy is between 0.5 and 1.5 times the marginal benefit of upstream government, the cost-sharing contract is more effective in improving downstream benefits. Conversely, when the marginal benefit of downstream is greater than 1.5 times, the marginal benefit of upstream, the more effective the cost-sharing contract is in improving the marginal benefit of downstream. The results of the study provide useful insights for the government to develop reasonable pollution management cooperation mechanisms to improve environmental management performance and thus enhance the sustainable development of the watershed.

Coordination Decision-Making for Intelligent Transformation of Logistics Services under Capital Constraint

The intelligent transformation of logistics plays a significant role in meeting the diverse needs of customers, improving operational efficiency, and reducing carbon emissions in logistics activities. Therefore, to achieve sustainable development, logistics enterprises need to face the decision-making problem of intelligent logistics transformation. In this paper, we construct a Stackelberg game model between a financially constrained logistics-service provider (LSP) and a well-funded logistics-service integrator (LSI) and discuss the impact of the wholesale price contract, the cost-sharing contract, the revenue-sharing contract, the two-part tariff contract, and the hybrid cost-sharing and revenue-sharing contract on the intelligence level of logistics services, the profits of supply-chain members, and the channel for logistics-service demand. We found that the cost-sharing contract and the revenue-sharing contract cannot achieve Pareto improvement in the profits of supply-chain members. In addition, the increase in bank-loan interest rates would seriously weaken the level of intelligence and market demand for the entire logistics service. However, when consumers do not have high requirements for the intelligence of logistics services, the two-part power–price contract can create a win–win situation for supply-chain members and increase market demand within a certain range; on the contrary, a hybrid contract of cost sharing and revenue sharing is the best choice. Moreover, in the process of contract design for the intelligent transformation of logistics services, it is necessary to pay attention to the influence of the price-sensitivity coefficient on decision-making.

Incentive Contracts for a Queueing System with a Strategic Server: A Principal-Agent Perspective

Queueing systems with strategic servers are common in the service industry. The self-interested service rate decision of the strategic server will be detrimental to the queueing system. To improve the service rates, designing incentive contracts for the server from the queueing system owner’s perspective is critical. This study investigates the incentive contracts of queueing systems under exogenous and endogenous price scenarios. The unit-price and cost-sharing contracts are introduced to coordinate the queueing system. The effects of pricing mechanisms and contract types on the queueing system are investigated theoretically and experimentally. The results reveal that regardless of whether the price scenario is exogenous or endogenous, the cost-sharing contract is more effective than the unit-price contract in incentivizing the server to make a service effort. The cost-sharing contract with endogenous price can reduce the service price. The cost-sharing contract can boost profits for both the owner and server, albeit with conditions.

Collaborative Innovation Strategy of Supply Chain in the Context of MCU Domestic Substitution : A Differential Game Analysis

The domestic substitution of the IC (the Integrated Circuit) industry improves economic efficiency and is significant in ensuring national security, which has gradually become an essential strategy for countries worldwide. Based on the background of domestic substitution of integrated circuits, we select a typical component Micro Controller Unit) as the research object, construct a three-level supply chain game model under different scenarios in a dynamic architecture, and analyze the game problem of collaborative innovation of the MCU supply chain. We fully consider the impact of factors such as time, cost and the innovation and collaborative innovation efforts of various supply chain members on the level of domestic substitution. Moreover, we put forward a two-part pricing + cost-sharing contract to achieve supply chain coordination. We found that: (1) Collaborative innovation of the supply chain in the centralized decision-making scenario achieves the highest level, followed by the cost-sharing scenario; (2) The two-part pricing + cost-sharing contract can help achieve supply chain coordination; (3) The trend of the MCU domestic substitution level with manufacturing cost is U-shaped, which means the increase of manufacturing cost may have a positive impact on the process of domestic substitution.

Blockchain-based traceability system adoption decision in the dual-channel perishable goods market under different pricing policies

The blockchain-based traceability system (BTS) can reduce product losses in the perishable goods market, which yields a loss-reduction effect, and offer authentic information, which triggers a premium effect. In a dual-channel perishable goods supply chain (DPGSC), including one supplier and retailer each, the supplier can operate the price of the direct channel, different or non-different from that of the traditional channel. To study the adoption of BTS in the supplier-led DPGSC, we employed a game-theoretical model to capture BTS adoption strategy under the differential and non-differential pricing policies and proposed an improved cost-sharing contract to boost the DPGSC performance. The results indicated that both the supplier and the retailer are willing to improve product quality, broaden the saleable region, and lower the production cost. The adoption of BTS mainly depends on the losses-reduction effect, premium effect, production cost, and tag cost, which is affected more by the premium effect than by the loss-reduction effect. Furthermore, their adoption is not always easier when the production cost is higher. Except for symmetric base demands, they benefit asynchronously from BTS. Synchronised adoptions can be realised only when the improved cost-sharing contract generates more profits and introduces excess momentum. Highlights Blockchain-based traceability system handles product losses and forged information Adoption decision-making processes under two different pricing policies are studied In the adoption process, the premium effect outweighs the loss-reduction effect Contract may introduce insufficient momentum, excess momentum, or new inefficiency Once excess momentum is formed, supply chain members' adoptions become synchronised