Green Demand Research Articles

Green Supply Chain Decision-Making considering Retailer’s Fairness Concerns and Government Subsidy Policy

Government’s green subsidy and retailer’s fairness concerns have great implications for enterprise’s operation strategy in the green supply chain (GSC). With the continuous deepening of retailer’s participation in supply chain management, the green services they provided by retailer have become a crucial role in promoting the terminal sales of green products. To further research the government subsidies and retailer’s fairness concerns on the optimal decisions of product pricing, green R&D, and service level, we construct four two-stage GSC models: no subsidy and fairness concerns, subsidizes manufacturer without retailer’s fairness concerns, subsidizes manufacturer with retailer’s fairness concerns, and subsidizes all members with retailer’s fairness concerns. The results show that subsidizes to manufacturers has significantly improved supply chain performance and environmental governance, but it exacerbates the unfair distribution of profits among members, and retailers’ fairness concerns drive them to offer lower green service level. With the green demand of consumers being unable to be fully satisfied, the consumer surplus and effectiveness of government environmental governance decrease accordingly. To eliminate the adverse effect caused by unfair distribution of profits, it is necessary to subsidize retailers so as to share their green service costs and increase their share of profits.

Why companies might under‐communicate their efforts for sustainable development and what can be done?

AbstractIn contrast with the increasing green demands from various stakeholders, corporations might prefer green blushing, that is, deliberately avoiding communicating their efforts for sustainable development. Surprisingly, these companies make substantial green achievements, but decide not to communicate their greenness. Using a broad literature review on green blushing and a conceptual reasoning backed up by anecdotal evidence, we expose the likely consequences of under‐communicating green achievements and develop several rationales that explain this apparent puzzle. We also propose that silent or timid corporations can make the best of two worlds, by taking advantage from communicating their greenness while avoiding its main pitfalls. We suggest practical ways to do it.

A vendor-buyer supply chain model with price, warranty and green sensitive demand under greening cost, warranty cost and revenue sharing contract

A vendor-buyer supply chain model with price, warranty and green sensitive demand under greening cost, warranty cost and revenue sharing contract

Supply Chain Coordination Model Under Green and Conformance Quality Sensitive Consumer Demand and Cost-Sharing Contract

Supply Chain Coordination Model Under Green and Conformance Quality Sensitive Consumer Demand and Cost-Sharing Contract

Reconciling conflict of interests in a green retailing channel with green sales effort

In this paper, we address conflicting objectives in a two-echelon retailer-manufacturer green retailing channel (GRC) with two types of substitutable green and non-green products. In the investigated model, the government pays (charges) the manufacturer a certain amount of subsidies (penalties) for producing green (non-green) products. The retailer can implement a green sales effort program to encourage customers to purchase green items instead of non-green products. In so doing, the retailer can transfer an uncertain amount of non-green demand to the green demand, while the total demand over both products remains constant. However, while producing green products is advantageous for the manufacturer due to governmental interventions, this is not the case for the retailer. To mitigate this conflict, we develop a game-theoretical model and a coordination mechanism that reconciles both members' interests. By applying the novel revenue-cost sharing along with a buyback (RCS&B) contract as an incentive mechanism, we mitigate conflicts and coordinate ordering and sales effort decisions throughout the channel. Our results show that the RCS&B contract may be quite effective in managing conflicting objectives toward aligning both GRC members’ interests. The proposed contract creates an economically viable, ambidextrous GRC by devising Pareto-improving solutions.

The optimal subsidy scheme and technology innovation strategy considering consumers' green premium

PurposeThis paper investigates how a regulator pursuing social welfare maximization designs an optimal subsidy scheme to stimulate technology innovation in the presence of a consumer green premium. Specifically, the authors solve the following questions: (1) Does the consumers' green premium affect the design of the subsidy scheme? (2) How should the firm choose a green technology innovation strategy under the optimal subsidy scheme? (3) Does technology innovation bring higher social welfare and lower environmental impact?Design/methodology/approachThe authors first develop a game model to explore the impact of subsidy schemes on social welfare without considering technology innovation. Then the authors investigate two innovation strategies, in-house innovation and external introduction, under the optimal subsidy scheme. Finally, they illustrate the optimal choices of innovation strategy for the firm, consumers and regulators.FindingsThe results reveal that the subsidy scheme will not always increase social welfare, which depends on the environmental improvement coefficient of the unit green level. The optimal subsidy level increases with the green premium, but it is not related to the size of the consumer green segment. Moreover, the success rate of in-house innovation will raise the optimal green level, but the company benefits from an increased success rate of in-house innovation only when the green segment is large enough. The green segment size and external green level jointly determine the choice of technology innovation strategy.Originality/valueThis research is the first to analyze this problem while considering the green demand and subsidy scheme simultaneously as drivers of a firm's technology innovation, thereby providing new managerial implications for decisions by the regulator and firms.

Matching-game approach for green technology investment strategies in a supply chain under environmental regulations

Facing increasingly severe environmental problems, green technology (GT) innovation has become an effective way to achieve the sustainable development of firms. Many manufacturers often choose and invest in appropriate GTs from GT-suppliers to improve the environmental impact of production. But others abandon GTs because they are too expensive to invest in. This paper thereby studies the dynamic investment strategy of GT in a manufacturer-supplier supply chain and explores the optimal government subsidy incentive and its impact on investment and sustainable production decisions. Firstly, an original two-sided matching game model (including two-sided matching analysis and Nash equilibrium analysis) is presented to study the matching process between a manufacturer with a limited investment budget and a GT-supplier with GTs and to determine the optimal GT investment-production strategy. Then, a government-manufacturer Stackelberg game model integrating differential game is constructed to determine the optimal government subsidy strategy and to investigate the effect of government subsidy on investment-production decisions. The results show that stable matching between the manufacturer and GT-supplier can be obtained. Numerical simulations verify the feasibility and rationality of the proposed matching game mechanism and demonstrate that GT investment profit is higher than non-investment profit, and subsidy profit is better than non-subsidy profit. The increase in the carbon price leads to an increase in the GT investment intensity. The increase in the carbon price can cause an increase in product greenness and green demand. The contributions of this paper are in providing an infrastructure for studying how managers can obtain the optimal GT investment-production strategy in the supply chain, and how the government formulates the optimal subsidy strategy to stimulate managers’ GT innovation behavior.

Impacts of heterogeneous green consumers on green innovation in electric vehicle and charging pile firms

Although the significant effect of heterogeneous green consumers on green innovation in electric vehicle firms and charging pile firms has been recognized, the influence of heterogeneous green consumers is still unclear. Therefore, we propose a two-dimensional model of vertically differentiated product preferences and horizontally differentiated green quality preferences. In the model, according to the heterogeneity in the perception of green awareness and anticipation of the green quality of charging pile firms, three green consumer segments, namely, light, medium and heavy, are considered. We use this economic model to examine the implications of green innovation by analyzing three green consumer innovation strategies. The findings show that when electric vehicle firms unilaterally implement green product innovation, the corresponding optimal price for charging pile firms decreases in the green consumer segment. The result also suggests that although three green consumer segments exist, it is wise for both types of firms to perform green product innovation. Furthermore, electric vehicle and charging pile firms should increase efforts in green innovation to satisfy consumers’ diversified green demands.

What drives green development in China: public pressure or the willingness of local government?

With China already committing to peak carbon dioxide emissions before 2030 and achieving carbon neutrality before 2060, green development is urgent. It is necessary to clarify the driving mechanism of green development to design the path of green development scientifically. From the internal perspective of the green development system, this paper divides the green development power into external power and internal power. The external power is the political pressure formed by the public’s green demands. The internal power is the endogenous power of green development transformed by the political promotion willingness of local government leaders. The research shows that (1) the green demands from the public and the accompanying political pressure can form the driving force of green development. (2) The political promotion intention has not been transformed into the endogenous driving force to promote green development in the research period. (3) The external driving force of public appeal is closely related to economic development, income and consumption levels, and education. This paper enriches the research literatures on the driving mechanism of green development and provides theoretical and practical exploration for the driving path of green development.

Virtual reality and sustainable behavior in business

In this short communication we propose virtual reality (VR) as an experimental approach to study sustainable behavior in business, taking advantage of its characteristics that provide objective assessment methods with high validity. This approach exploits VR capabilities to generate immersive environments that recreate situations under which theorized relationships of sustainable behavior reveal themselves. We conjecture that high-immersive virtual environment (HIVE) research on corporate responsiveness to green demand will improve our understanding of the conditions and contexts under which a theory-driven approach to study this sustainable behavior applies.

House Prices, Open Space, and Household Characteristics

The allocation of land to alternative residential uses, including private and public uses, is a fundamental business decision. Given limited research on the topic, the present study fills the need for research on willingness to pay for house and neighborhood attributes inclusive of the value of open or green space. We document diminished private green space and buyer demand for private and public open space. The focus is on the types of open or green space and variation in their capitalization effects over time. Using a richly specified hedonic model that includes house characteristics along with subdivision and neighborhood attributes, we find that both private and public forms of green space increase house prices, especially since 2011. Moreover, there is substitutability between private and open green space, and willingness to pay for open space varies by household characteristics.

Green capacity and technology choice strategies with emission constraint setting

Under dual pressures of stringent environmental policies and upbeat green demand, manufacturers which used to apply traditional manufacturing technology are motivated to construct green capacity and revamp their production strategies. In this paper, we establish a Stackleberg game between a welfare-maximizing regulator who sets an emission cap and a profit-seeking manufacturer who makes technology choice consisting of green capacity construction and production strategies. The firm builds green capacity under uncertain green demand, but prices and produces until the demand is fully observable. Equilibrium emission cap for the regulator and the response of the firm are derived. We discover that equilibrium strategies adjustment is highly affected by two key correlations between two products: comparative emission performance and product substitutability. Specifically, if comparative emission performance of green production is greater (less) than product substitutability, the equilibrium green capacity decreases (increases) with the environmental damage degree, and the equilibrium emission cap tightens (levels down) with the investment cost of green capacity. Interestingly, as green manufacturing generates more unit emission, the equilibrium emission cap first increases, then declines and finally flattens. In response, the firm adopts the single-green technology firstly, after which it turns to a mixed production mode and eventually operates merely conventional production.

Aligning the purchase of green logistics practices between shippers and logistics service providers

This paper explores shippers’ (i.e. logistics buyers) and logistics service providers’ (LSPs) perceptions of green concerns under diverse contractual settings during the key phases of the logistics purchasing process: request for proposal, negotiations, contracting and execution. Accordingly, it derives recommendations that could increase the actors’ inter- and- intra-organisational alignment on green targets throughout these phases. Empirical data are obtained from eight individual cases of three shippers and five LSPs, representing the buyer/seller roles within logistics arrangements. Contrary to previous literature holding the view that setting more green demands by shippers would guarantee green outcomes, the findings show that shippers’ green demands may hinder green logistics applications due to impediments to LSPs’ asset-sharing strategies. Also, a deadlock situation is revealed in the negotiations phase, where both actors await each other to introduce additional demands/offers—calling for further regulatory intervention to release this deadlock. Moreover, this paper shows how a mismatch of interests in contractual periods between shippers and LSPs can obstruct green investments—signalling that the green criterion is not the decisive factor in shaping shippers’ outsourcing strategies. The findings also stress a lack of follow-up efforts by shippers on green measures that were specified pre-contract, attributing this to contrasting intra-organisational objectives within shippers’ firms. This paper contributes to the green logistics purchasing literature by revealing how different contractual settings play an important role in shaping shippers’/LSPs’ perceptions of green concerns during the logistics purchasing process. Further, it is one of the first studies to provide phase-specific recommendations to increase the actors’ alignment on green targets.

Conceptual design scheme automatic generation and decision-making considering green demand

Conceptual design is a key stage of product design. In order to make the design scheme have better greenness, this paper studies the automatic generation and decision-making technology of green demand-driven design. This paper mainly starts from the green demand of the conceptual design stage of electromechanical products, considers the introduction of green attributes into the product design information model, and builds an effective design space for electromechanical products. I This paper proposes an effective method for the low efficiency of current design schemes. The search strategy finally uses the genetic algorithm to complete the automatic generation of the design scheme. Considering the ambiguity and uncertainty of the design information, the LCA evaluation model based on the green feature is established, and the life cycle evaluation of the electromechanical products is completed. The effectiveness of the method is verified by an example of a car lift.

Energy saving and emission reduction method for green transportation in tourist cities based on grey correlation degree

To solve the problem of high energy consumption in the existing tourism city green transportation energy saving and emission reduction methods, this paper proposes a new method based on grey correlation degree for tourism city green transportation energy saving and emission reduction. Construct a green transportation energy demand prediction model and a greenhouse gas emission calculation model, calculate vehicle greenhouse gas emissions, and use the grey correlation analysis method to connect the models to select the best vehicle energy saving and emission reduction parameters to achieve transportation energy saving and emission reduction. The research data shows that compared with the traditional method, the proposed method can effectively reduce the emission energy consumption, the energy saving rate can be up to 93%, and the minimum greenhouse gas emission is 210 tons. It fully shows that the proposed energy saving and emission reduction methods of green transportation in tourist cities have better energy saving and emission reduction effects.

A single-vendor single-buyer supply chain model with price and green sensitive demand under batch shipment policy and planned backorder

This paper considers a two-level supply chain which consists of a single-vendor and a single-buyer. The vendor produces a single product in lot and transfers the whole lot to the buyer in a combination of equal and unequal sized batches. All unequal sized batches are in a geometric progression with a fixed common ratio. Consumer's demand is sensitive to the retail price and greening improvement level of the product. At the buyer, planned shortages are allowed and are completely backlogged. Assuming that the buyer has higher decision power than the vendor, we develop non-coordinated decentralised model and coordinated model with cost sharing contract, and the integrated centralised model. The numerical results show that the cost sharing contract gives an impressive improvement in the profits of both the vendor and the buyer over their profits in the non-coordinated system. A sensitivity analysis is performed to explore how the changes in the key model-parameters effect the optimal profits of the vendor and the buyer and the whole supply chain.

Green Logistics Development Decision-Making: Factor Identification and Hierarchical Framework Construction

The influential factors of green logistics development have been an important research topic for academics. However, little attention has been devoted to studying the issue of the prioritization and the hierarchical structure of these factors. The purpose of this study is to identify the key factors influencing the development of green logistics, and to explore the prioritization and the hierarchical structure of the influential factors. An indicator system for influential factors of green logistics development is first developed based on the theory of triple bottom line, including sixteen indicators or factors. The comprehensive influences and the prioritization of these sixteen factors are then analyzed using the DEMATEL method and the multi-level hierarchical structure of these factors is constructed by applying the ISM method. The results indicate that government policies, public supports, laws and regulations, green education, green technology innovations, consumer green demands, quantity and quality of green logistics talents are more influential than the other factors. Social factors including laws and regulations and government policies, public supports and green education are the underlying factors affecting the development of green logistics. Economic factors are at the middle levels and environmental factors are at the surface-level of the hierarchical structure. Recommendations are finally given to governmental agencies and business firms. These findings will be beneficial to promoting the sustainable development of green logistics.

Resource efficient eco-innovations for a circular economy: Evidence from EU firms

Innovation adoption and diffusion by firms are key pillars for the EU strategy on resource efficiency and the development of a circular economy. This paper presents new EU evidence regarding the role of environmental policy and green demand drivers to sustain the adoption of resource efficiency-oriented eco-innovations. Using a large cross-section dataset of EU firms and accounting for sample selection and endogeneity, the results strongly support the idea that environmental policy and demand-side factors are both significant in driving the adoption of innovations that promote recycling, reduce waste and decrease the use of materials. The paper provides a relevant piece of new, quantitative-based knowledge, which complements the large case study-based evidence on sound management and policy strategies for the circular economy.

Effects of Green Production Practices on Financial Performance of Manufacturing Firms in Kenya

Common issues facing firms all over the globe in modern business include: climate change and global warming, decline in the number of basic production natural resources pollution control and a demand for goods which are environmentally friendly. Therefore, firms have to come up with innovative products and processes by implementing green technologies, eco-design, and international environmental management systems in their production in what is called 'green production' for them to meet these green demands. The concept has been adopted therefore in developed countries but remains a challenge in developing countries; a need for more studies in the area. The objective of this study was to examine the effects of green production on financial performance of manufacturing firms in Mombasa County, Kenya. The study was guided by two theories; resource dependence theory, and institutional theory. This study adopted a descriptive research design. The target population of this study was all the manufacturing firms in Mombasa County. The study employed purposive sampling technique by using a sample comprising of all 70 firms registered with the Kenya Association of Manufacturers as at December 2017. Primary data in this study was collected using a semi-structured questionnaire that was administered using drop and pick later method. The completed questionnaires were first edited for consistency and completeness before processing responses. After data cleaning, data was coded, entered into the computer for analysis. Data was analyzed using SPSS. The data was analyzed and presented using descriptive statistics such as means and percentages, frequency counts, and standard deviations. Out of the 70 questionnaires given to the field, 60 of them were filled and return making the return rate to be 85.7%. Also, majority (70%) of the firms have been in operation between five to ten years, followed by those that have been in operation for over ten years (20%) and finally those who have operated for less than five years came last at 10%. Equally, all the firms (100%) were registered with the various environmental management bodies before carrying out their activities. Further, majority of the firms: (80%) had a well outlined environmental protection policy; (70%) had environmental management department; and (91.7%) indicated that firms were ISO 14001 Certified. In relation to green operation strategies, the trend indicates that majority of the respondents (97%) have heard of green operation strategies in their firms. In relation to design for use of raw materials, use of recyclable materials is the most implemented green production practice as indicated by a mean of 4.34. In relation to design for manufacture, the most prevalent adopted design for manufacture or production is alternative production techniques (4.32), followed by Low generation of waste (4.12), Low/clean energy consumption (4.01), fewer production processes (3.78) etc. As per the issue of design for product use, no energy/auxiliary material use practice of design for product use was the most adopted by firms (3.929), followed by Clean energy source practice (3.898), Clean consumables during use (3.762), Low energy consumption (3.712) etc. In relation to firms' performance, the firms that had adopted green manufacturing concepts had their financial performance components improved. The most improved financial component was earnings before interest and tax with a mean score of 4.471. This was followed by: return on sales (4.327), return on investment (4.215), sales growth (4.112), profitability (4.061), and finally return on equity (3.904).

Demand forecast in the emergency department in Minas Gerais, Brazil

This study presents a mathematical model to carry out the demand forecasts in relation to patientes classified as green in the emergency department of a municipality in Minas Gerais, Brazil. In addition, another approach will investigate whether the green patients demand remains the same over the weekend, as compared to the weekdays, since there is no support from Primary Health Care units over the weekend. A retrospective study of the emergency service in the municipality of Monte Carmelo was carried out from January 2014 to December 2017.The time series of the patients classified as green during the host by the nurse, according to the Manchester Triage Scale, was analyzed in the temporal domain for the construction of a parametric model with the purpose of realizing the demand forecast. The Manchester Triage Scale has been adopted in most emergency department as a guiding instrument for risk classification, prioritizing the most serious cases. The data processing was fulfilled using Software R Version 3.4. The ARIMA model (1,1,1) presented a better fit for this forecast. The predictions of this model are values close to those observed for the number of patients seen that ranges from 1780.4 to 1796.6 patients per month. In relation to the demand of patients classified as green at the weekend, it has shown that it is slightly lower than the weekend, but it is still an expressive demand. The application of the models must be seen by the managers as a tool to aid decisions, thus it must support processes of planning, management and evaluation of public policies. In this context, mathematical models for demand forecasting are an instrument for management care and services.