Decentralized Decision Model Research Articles

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.

Modular design of new products and remanufacturing of used products under mass customization

Modular architecture design can not only increase the product variety and thus make mass customization (MC) easier, but also improve interchangeability and then lower the remanufacturing cost. This paper models a remanufacturing MC supply chain with one manufacturer and one retailer. The manufacturer, as a Stackelberg game leader, designs and then sells the new and modular MC products via its brand retailer, and meanwhile the remanufacturing of used MC products would be carried out by either the manufacturer or the retailer. We study the optimal modular design for new MC products and the best remanufacturing mode for used MC products. One centralized and two decentralized decision models are formulated, and the equilibrium solutions of proposed models are compared and analyzed. Findings show that, compared to the retailer-remanufacturing mode, the manufacturer-remanufacturing mode can be superior in terms of the ability to cope with customer customization requirements (i.e., the modularity level), total supply chain profit, and consumer surplus. Moreover, both supply chain members and consumers would prefer the manufacturer-remanufacturing mode when the parameters meet certain conditions. We also extend the model to two scenarios: the remanufacturing is bounded by cores supply and the retailer acts a leader, so as to verify the robustness of main results. The above theoretical results are verified by numerical examples.

Platform Operations under Dual-Channel Catering Supply Chain

In the modern catering business model, restaurants usually use established platforms to promote their food and use two channels to sell their food: online and offline sales. We construct demand functions for online and offline, considering promotion and substitution relationships by a revised Bertrand model. We first consider three classic models: the decentralized decision model, the equilibrium decision model, and the centralized decision model. In the decentralized decision model, the platform decides both the promotional effort and the online discount; in the equilibrium decision model, the platform decides the online discount, while the food service provider decides the promotional effort. In the centralized decision model, the takeaway platform and the food service provider have maximized the overall profit as the decisive goal. We find that the online discount decreases in price when the impact factor of the online promotion is high but increases in price when the impact factor of the online promotion is low. Then, we analyze and compare the results under three models. We find that when the substitution factor is low enough, or the impactor factor of online promotion is low enough, the global optimal platform discount is higher than the equilibrium platform discount and the decentralized online discount; otherwise, the results are the opposite. In addition, the global optimal promotional effort is always higher than the optimal promotional effort in the decentralized model. When the substitution factor is low enough, or the impactor factor of online promotion is low enough, the global optimal promotional effort is higher than the equilibrium optimal promotional effort; otherwise, the result is the opposite.

Pricing Decision of the Dual-Channel Supply Chain with the Manufacturer’s Extended Warranty

With the rapid development of the internet economy, many manufacturers have opened online direct sales channels and built multi-channel distribution systems. Meanwhile, both consumers and companies are paying more attention to extended warranty services. Considering a dual-channel supply chain with a manufacturer and a retailer, we assume the manufacturer provides an extended warranty in the online direct channel and investigates the decision making of the supply chain players. We develop three game models to study this problem, and they are the basic model without extended warranty (Model B), the decentralized decision model with the manufacturer’s extended warranty (Model M), and the centralized decision model with the manufacturer’s extended warranty (Model C). The Stackelberg game method is used to solve the established model, the influence of relevant parameters on the solution result is analyzed, and different models are compared. Compared with Model B, we find that the whole supply chain always be better, but the retailer would be worse in Model M. Compared with Model M, we find that the entire supply chain always performs better in Model C. Finally, we do some sensitivity analysis.

Research on Pricing and Coordination of Dual-Channel Green Supply Chain

In recent years, environmental pollution and resource waste have become the focus of heated discussion around the world. In order to realize green and sustainable development, the development of green supply chain (GSC) has attracted the attention of many scholars. The research object of this paper is the dual-channel green supply chain (DGSC) composed of online channels and offline channels. The supplier is the leader of the entire DGSC, and it needs to optimize the wholesale price of the product and the level of green investment to maximize its own benefit. In addition, the supplier also needs to establish contracts with network sales platform (NSP) and store sales platform (SSP) to increase the benefit of NSP and SSP, and ultimately increase the benefit level of the entire DGSC. Among them, we constructed a centralized decision (CD) model and a decentralized decision (DD) model, and obtained the optimal pricing, optimal greenness and optimal benefit of the supplier, NSP and SSP under the two models. We found that the benefits of SC members under the DD model are generally lower than those of the CC model. Therefore, we built contracts between the supplier, NSP and SSP to coordinate. Finally, we substituted specific parameters to verify the model. The following conclusions are drawn: (i) When consumers prefer online sales channels, it will positively affect the online sales price, online sales volume and greenness level of DGSC. At the same time, it negatively affects offline sales price and sales volume. (ii) The benefit of DGSC and the benefit of NSP, SSP, and the supplier show a phenomenon of decline first and then increase with respect to consumers’ preference for online sales channels. (iii) Under the coordination contract, the subsidy factor positively affects the benefits of the supplier and online and offline wholesale prices, and negatively affects the benefits of online platforms and physical stores.

Pricing and coordination in a green supply chain with a risk-averse manufacturer under the reference price effect

This paper considers a green supply chain using manufacturers and retailers as the research objects. The pricing and coordination strategy of the green supply chain, considering a risk-averse manufacturer, is investigated under the reference price effect. We establish centralized, decentralized, and cost-sharing contract decision-making models and then provide the optimal balancing strategy for each model. Further, we analyzed the optimal equilibrium strategy of different models. In the end, validate them through numerical simulation. We have found that the cost-sharing contract model is better than the decentralized decision model. Besides, manufacturers’ degree of risk avoidance affects the wholesale price, product greenness, retail prices, and profits of supply chain members. It is verified that the cost-sharing contract can coordinate the supply chain system to increase the profit of members of the supply chain.

Research on Pricing and Coordination of Fresh Supply Chain with Altruistic Fairness Concern

Considering a fresh supply chain consisting of one supplier and one retailer, this paper studies the pricing and coordination of fresh supply chain under altruistic fairness concern of the supplier. Based on the centralized decision and Stackelberg game theory, the decentralized decision model of supplier’s altruistic fairness concern is constructed, the pricing decision is analyzed, and the cost-sharing contract based on altruistic fairness concern is designed for coordination. The results show that the altruistic fairness concern of supplier can inspire retailer to improve the freshness-keeping effort level, which can help to the operation of retailer and supply chain, but damage the profit of himself. Freshness-keeping efficiency has an important impact on the marketing strategy of retailer: the retailer will implement the “high-quality with high price” if the freshness-keeping efficiency is low, otherwise implement the “high-quality with low price”. Cost-sharing contract based on the altruistic fairness concern can realize the perfect coordination of supply chain within a certain range.

Decision-Making and Coordination of Remanufacturing Closed-Loop Supply Chain with PIR under the Different Government Subsidy Strategies

Government subsidies and process innovation for remanufacturing (PIR) have become effective measures to improve the recycling and remanufacturing efficiency of waste products and promote sustainable economic development. Under different government subsidy strategies, the PIR decision and coordination of the closed-loop supply chain (CLSC) of authorized competition remanufacturing are studied. This paper constructs five centralized and decentralized decision models of CLSC and analyzes the influence of government subsidy strategy and PIR input entity differences on the competition and cooperation relationship between manufacturers and remanufacturers and the performance of CLSC. A fixed license fee contract is designed to realize CLSC coordination and to improve the performance and operational efficiency of the CLSC. It is found that patent licensing fees can always play a role in sharing government subsidies between the manufacturer and remanufacturer, and making changes in government subsidy strategies only affects formulation of patent licensing fees. Manufacturer PIR input mode is more conducive to improving the market demand for new products, while remanufacturer PIR input mode is more conducive to improving the PIR input level, remanufactured product market demand, CLSC members and overall performance. Moreover, government subsidies can produce better efficiency and effects under remanufacturer PIR input mode. A fixed license fee contract can coordinate a CLSC effectively. The increase in government subsidies and PIR input effect can effectively expand the negotiation space between the manufacturer and remanufacturer, which is conducive to achievement of coordination contracts. Finally, the main conclusions are verified by numerical analysis.

Incentive Mechanism Design in Collaborative Management of Public Health Emergencies

Against the background of the worldwide spread of the COVID-19 pandemic, due to the lack of effective collaborative incentive mechanisms, issues of dislocation and incoordination have emerged in the public health emergency management system (PES) globally. Nevertheless, the available research rarely touches upon the incentive mechanism design for the collaborative management of PES. To alleviate these inefficiency operations problems with PES, three game-theoretical decision models, including a decentralized decision model without public governance policy incentive (GPI), a decentralized decision model with GPI, and a collaborative decision model with GPI, were developed and analyzed to explore and design the incentive mechanism of PES. Furthermore, the corresponding numerical and sensitivity analyses were conducted to validate the modelling results in the article. The research results show that: (1) the collaborative decision scenario with GPI performs best, and the decentralized decision scenario with GPI performs second-best regarding the equilibrium emergency management efforts (EMEs) and utilities in all the decision scenarios; (2) an incentive mechanism of the “carrot + Stick” can effectively enhance the collaborative management of public health emergencies and its governance-driven operational performance/efficiency; (3) strengthening the performance assessment of emergency management for relevant government departments is beneficial in improving the overall emergency management efficiency of the PES; (4) reducing the cost of EMEs and enhancing the effectiveness of EMEs are conducive to improving the overall emergency management efficiency of the PES. This research provides a novel framework for designing an effective incentive mechanism to overcome the incoordination impacts and achieve collaborative operations across the PES.

Achieving Resilience: Resilient Price and Quality Strategies of Fresh Food Dual-Channel Supply Chain Considering the Disruption

In the face of demand disruptions, dual-channel supply chains (SCs) that lack resilience may be more vulnerable. Reaching moderate SC resilience through coordination is essential for dealing with disruptions. This paper investigates the operation management of a dual-channel fresh-food SC (FSC) under disruption. The centralized and decentralized decision models propose joint quality efforts based on the consideration of quality preference and loss. From the perspective of SC resilience, we analyze how SC members can optimally make price, quality, and quantity decisions resiliently and robustly under the disruption of quality preference. The results show that (1) no matter the kind of decision model, considering quality preference disruptions can significantly increase the SC profit; (2) there is a resilience range in decisions with the influence of the disruption cost. The original optimal decisions in the resilience range are robust and sustain SC performance without change; and (3) the disruption significantly impacts offline channel retailers, who are at a disadvantage when competing with online channels. A centralized decision model can achieve higher profits and quality levels in response to demand disruptions. This paper extends the concept of resilience to the FSC and provides suggestions for fresh-food enterprises to conduct quality efforts and cope with demand interruption.

How Government Subsidy Impacts on the Supply Chain Decision for LNG-Fuelled Ships

LNG-fuelled ships help fight environmental pollution induced by fossil fuel. Chinese government has also considered encouraging the shipbuilder’s initiative of producing or introducing LNG-fuelled ships through subsidies. However, rare scholars have concerned the impact of government subsidy on the supply chain decision of LNG-fuelled ships in the existing studies. This study takes green degree and government subsidy into account in the LNG-fuelled ship supply chain of a manufacturer and an owner and studies the pricing, market demand, and supply chain benefits. Our main contributions are considering the correlation between the green degree of LNG ships and government subsidy factors and exploring the influence of government subsidy on supply chain decision-making under decentralized and centralized decision-making by ship manufacturers and owners. The results show that government subsidies are conducive to promoting the whole profit and the market demand in the ship supply chain. Centralized decision generates higher profits than decentralized decisions. In the centralized decision model, government subsidies and the green degree of LNG-fuelled ship are positively correlated with the market demand. In the decentralized decision model, the price of an LNG-fuelled ship charged by shipbuilder when providing subsidies for owners is greater than that when providing subsidies for shipbuilder. Manufacturers and owners should pay attention to the greenness of ships, and the government should adopt appropriate subsidy policies to encourage the production and application of LNG ships.

The Impact of Government Subsidies on the Low-Carbon Supply Chain Based on Carbon Emission Reduction Level.

To improve low-carbon technology, the government has shifted its strategy from subsidizing low-carbon products (LCP) to low-carbon technology. To analyze the impact of government subsidies based on carbon emission reduction levels on different entities in the low-carbon supply chain (LCSC), game theory is used to model the provision of government subsidies to low-carbon enterprises and retailers. The main findings of the paper are that a government subsidy strategy based on carbon emission reduction levels can effectively drive low-carbon enterprises to further reduce the carbon emissions. The government’s choice of subsidy has the same effect on the LCP retail price per unit, the sales volume, and the revenue of low-carbon products per unit. When the government subsidizes the retailer, the low-carbon product wholesale price per unit is the highest. That is, low-carbon enterprises use up part of the government subsidies by increasing the wholesale price of low-carbon products. The retail price of low-carbon products per unit is lower than the retail price of low-carbon products in the context of decentralized decision making, but the sales volume and revenue of low-carbon products are greater in the centralized decision-making. The cost–benefit-sharing contract could enable the decentralized decision model to achieve the same level of profit as the centralized decision model.

Uncertain two-echelon green supply chain models based on revenue sharing contract

In the present paper, we consider a two-echelon supply chain problem including a manufacturer selling green products to a retailer, and then selling to customers. The market base, customer demand, production cost, and sensitivity to price are recognized as uncertain variables due to the influence of many human factors in reality. The aim is to maximize the entire profit of the supply chain, improve the greening level of products, and solve the contradiction between economic growth, resource protection and ecological environment. Retailer-led and bargaining expected value game models with revenue sharing contract are established. The market demand is affected by retail price and greening level. The revenue sharing contract and its parameters are designed to achieve perfect coordination of the established supply chain models. Some inferences about the optimal decision variables are obtained. Finally, numerical experiments suggest that the revenue sharing contract raises the greening level and reduces the retail price significantly compared to the decentralized decision model.

Quality Decision-Making Behavior of Bodies Participating in the Agri-Foods E-Supply Chain

The quality of agri-foods in e-supply chains confronts more threats than that in the traditional agri-food supply chain. However, most of the existing studies focusing on the quality problems of fresh agri-products are mainly cases studies and statistical analyses, and they do not take into account the farmers’ willingness to comply with safe agri-food supply procedures. To solve the supply quality problems of fresh agri-foods and help participators make a better choice, the decision-making behavior on the supply quality of agri-foods in the e-supply chain was deeply studied in this paper using game theory. Some factors related to the decision behavior of the supply chain were analyzed, including the supervision intension of the government, the rights protection consciousness of consumers, and the intensity of punishment for poor-quality agri-foods. These factors have an important influence on the farmers’ willingness to provide high-quality products and e-business’ probability of inspection. Compared with three different decision models of agri-food e-supply chains, the results show that the decentralized decision model is better than the centralized model from the view of quality protection. The behavior of members of the supply chain is as follows: the farmers’ willingness to supply high-quality agri-foods increases with the increase in the consumers’ consciousness of their rights and the government’s supervision intensity. The “experience deviation” phenomenon also occurs when a new e-business makes a decision about its quality inspection behavior in this e-supply chain where the quality information is traceable. As such, e-business enterprises should reduce their quality inspection behavior based on the increase in the government’s supervision intensity. This happens to be opposite to the traditional experience where quality information is not traceable. This study not only extends the research framework of the novel electronic supply chain, but also provides a certain reference for the subsequent research and e-business practices of fresh produce in developing countries.

The Impacts of Green Innovation Input and Channel Service in a Dual-Channel Value Chain.

This paper constructs a dual-channel value chain composed of one altruistic manufacturer and one altruistic retailer, where the manufacturer makes green innovation input for green products and sells its green products to its customers through both the direct channel and the traditional channel, the retailer provides channel service for customers and sells green products through the traditional channel. We consider two scenarios in which the manufacturer and the retailer make decentralized and centralized decisions, respectively. We develop two dynamic game models for the two scenarios and analyze the dynamic behaviors of the two dynamic game models using bifurcation diagram, LLE (largest Lyapunov exponent) and attraction of basin, etc. We find that the stability region in decentralized decision model is greater than that of centralized decision, and narrow with increase of service value, green innovation input. In the decentralized decision model, the stability of the system decreases with the altruistic behavior increasing. With the price adjustment speed increasing, the dual-channel green value chain system enters into chaotic state through flip bifurcation or N-S bifurcation. In the stable state, the manufacturer and the retailer can obtain the maximum utility with the appropriate value of green innovation input. In the chaotic state, the utilities of the manufacturer and retailer are greatly affected and significantly reduced. This study will provide good guidance for sustainable development decision-making of dual-channel green value chain.

Warranty Period Decision and Coordination in Closed-Loop Supply Chains Considering Remanufacturing and Consumer Behavior

The closed-loop supply chain management model is an effective way to promote sustainable economic development and environmental protection. Increasing the sales volume of remanufactured products to stimulate green growth is a key issue in the development of closed-loop supply chains. By designing an effective warranty strategy, customer’s perceived value can be enhanced and market demand can be stimulated. This study cuts through the warranty period of closed-loop supply chain products. Based on the perspective of consumer behavior, game theory is used to construct the optimal decision-making model for closed-loop supply chains. The optimal warranty decision making for new products and remanufactured products under centralized and decentralized decision-making models is discussed. Further, the impact of the closed-loop supply chain system with warranty services and the design of contract coordination is also shown. We show that consumer preference has a positive impact on the sales of remanufactured products and the profits of enterprises; with the extension of the new product and remanufacturing warranty period, the profit of the supply chain system first increases and then decreases, and the value is maximized at the extreme point in the manufacturer-led decision-making model. Furthermore, the leader gains higher profits with bargaining power, but the profit of the supply chain system under decentralized decision model is less than that of the centralized decision model, reflecting the double marginalization effect. The revenue sharing contract and the two-charge contract designed in this study coordinate the closed-loop supply chain system with warranty services, so that the member companies in the supply chain can achieve Pareto improvement.

Robust coordination of supply chain with loss aversion

This paper considers a supply chain consisting of a risk-neutral supplier and a loss-averse retailer under limited distributional information of demand. The robust approach is applied to deal with the integrated decision model and the decentralized decision model when only the mean and variance of demand distribution is assumed to be known. A combined buy-back and loss-sharing contract (BL contract) is designed to coordinate the supply chain and arbitrarily allocate the expected profit between two sides of the supply chain. Specially, the explicit expression of the unique buy-back credit that can coordinate the supply chain is provided when the loss-sharing fraction equals to the reciprocal of the loss aversion degree. Several numerical experiments are performed to illustrate the effects of parameters on the decision.

When Ignorance Can Be Bliss: Organizational Structure and Coordination in Electronic Retailing

This study examines coordination issues that occur between the marketing department and the information technology (IT) department in electronic retail settings. We consider a marketing department that is responsible for choosing the level of advertising to generate traffic to the firm’s website and an IT department that is responsible for choosing IT capacity to provide web visitors a satisfactory experience. The focus here is to examine how duopolistic advertising competition among firms can affect the organizational structure (centralized or decentralized) within each firm. In essence, our interest lies in the question: How does the presence of interfirm competition affect intra-firm coordination (i.e., organizational structure)? As a benchmark, we develop and solve a centralized decision model wherein the levels of advertising and IT capacity are jointly chosen in each firm to maximize profit. This is compared with a decentralized decision model in which the marketing department could potentially advertise suboptimally because its assessment of IT factors (the served traffic rate) is inaccurate. We find that competition can lead to a decentralized equilibrium in which both firms choose not to coordinate among their internal departments. More importantly, we find that when marketing moderately underestimates IT service quality, coordination results in a prisoners’ dilemma (PD) equilibrium for each firm whereas decentralization is socially optimal but with an off-equilibrium outcome (resulting in higher profits for each firm). That is, the conventional wisdom that “more coordination is good” could push firms toward a PD equilibrium when they can both be better off by not coordinating internally in the face of competition. This result also implies that if marketing tends to underestimate the capabilities of the IT department, it may be better to encourage such firms to coordinate less rather than encouraging them to coordinate more. The online appendix is available at https://doi.org/10.1287/isre.2017.0725 .

Mechanisms of Collaboration in the Hotel Supply Chain: Two-Stage Ordering Contract and Option Contract

This paper considers a hotel supply chain consisting of a hotel and an online travel agent (OTA) for the distribution of a limited number of rooms through both offline and online channels. Under the merchant cooperation assumption, to overcome the disadvantages of the decentralized decision model and demand uncertainty, two collaboration mechanisms, namely a two-stage ordering contract and an option contract, are introduced to increase the profit in the hotel supply chain. This paper investigates the optimal decisions of the hotel and the OTA under different contract models. Moreover, the authors analyze the effect of demand uncertainty and the interaction of demand variability and the hotel’s capacity on the profits of the hotel and the OTA under different models. The results show that both the two-stage ordering contract and the option contract can increase the profits of the entire supply chain and the hotel; however, the profit of the OTA can be increased through the two-stage ordering contract and option contract only when the hotel’s capacity is relatively small and the demand variability is big; otherwise, the two collaboration mechanisms cannot increase the OTA’s profit.