Low-carbon Supply Chain Research Articles

Research on differential game model of vertical cooperation of dual-channel low-carbon supply chain

Research on differential game model of vertical cooperation of dual-channel low-carbon supply chain

Financing Strategy of Low-Carbon Supply Chain with Capital Constraint under Cap-and-Trade Regulation

Cap-and-trade regulation provides incentives for manufacturers to reduce carbon emissions, but manufacturers’ insufficient capital can disrupt the implementation of low-carbon emission reduction technologies. To alleviate capital constraints, manufacturers can adopt external financing for low-carbon emission reduction investments. This paper studies the independent financing and financing cooperation behavior in a supply chain in which the manufacturer and retailer first implement low-carbon emission reduction technologies and then organize production and sales in accordance with wholesale price contracts. Through comparing the optimal profits and low-carbon emission reduction levels under the independent financing and financing cooperation mode, we come to the following conclusions: (1) Although financing interest increases the cost of the supply chain, manufacturers prefer to invest in reducing carbon emissions rather than buying carbon quotas. (2) When financing independently, a decentralized decision-making mode (MD) is the best choice for manufacturers. (3) In cooperative financing, when the supply chain adopts a decentralized decision-making mode (SD) in which the retailer determines the financing cost-sharing ratio according to their optimal profit, the profits of the supply chain and its members are significantly improved. (4) When manufacturers and retailers adopt a centralized decision-making model (SC) in cooperative financing, they jointly determine the financing cost-sharing ratio and the level of low-carbon emission reduction. If the financing cost-sharing ratio meets a certain threshold range, the profits of manufacturers and retailers achieve Pareto improvement, indicating that this cooperative financing model is effective.

An Optimal Control Model of the Low-Carbon Supply Chain: Joint Emission Reduction, Pricing Strategies, and New Coordination Contract Design

This paper is contended with the joint emission reduction and pricing decision problems, as well as coordination contract design issue for a class of low-carbon supply chain system. Here, the evolution of emission reduction level is characterized by a linear differential equation. Also, product demand depends on emission reduction level, promotional effort, and retail price in a separable multiplicative way. By considering an optimal control model of the low-carbon supply chain, differential game theory is used to obtain the optimal joint emission reduction efforts, pricing strategies, and the optimal emission reduction level in different decision systems. Subsequently, attention is focused on the design of new coordination contract with the fixed or varied wholesale price such that, under the dynamic decision perspective, supply chain system can realize the win-win situation of economy and ecology, as well as the profits of individual members are Pareto improvement. Finally, several numerical examples are given to show the validity and feasibility of the presented results.

Proposal of a Vehicle Dispatching Algorithm Considering Production Schedules for Low-Carbon Supply Chains

Proposal of a Vehicle Dispatching Algorithm Considering Production Schedules for Low-Carbon Supply Chains

Supplier Selection and Order Allocation under a Carbon Emission Trading Scheme: A Case Study from China.

In implementing carbon emission trading schemes (ETSs), the cost of carbon embedded in raw materials further complicates supplier selection and order allocation. Firms have to make decisions by comprehensively considering the cost and the important intangible performance of suppliers. This paper uses an analytic network process–integer programming (ANP–IP) model based on a multiple-criteria decision-making (MCDM) approach to solve the above issues by first evaluating and then optimizing them. The carbon embedded in components, which can be used to reflect the carbon competitiveness of a supplier, is integrated into the ANP–IP model. In addition, an international large-scale electronic equipment manufacturer in China is used to validate the model. Different scenarios involving different carbon prices are designed to analyze whether China’s current ETS drives firms to choose more low-carbon suppliers. The results show that current carbon constraints are not stringent enough to drive firms to select low-carbon suppliers. A more stringent ETS with a higher carbon price could facilitate the creation of a low-carbon supply chain. The analysis of the firm’s total cost and of the total cost composition indicates that the impact of a more stringent ETS on the firm results mainly from indirect costs instead of direct costs. The indirect cost is caused by the suppliers’ transfer of part of the low-carbon investment in the product, and arises from buying carbon permits with high carbon prices. Implications revealed by the model analysis are discussed to provide guidance to suppliers regarding the balance between soft competitiveness and low-carbon production capability and to provide guidance to the firm on how to cooperate with suppliers to achieve a mutually beneficial situation.

Collaboration in a low-carbon supply chain with reference emission and cost learning effects: Cost sharing versus revenue sharing strategies

The growing environmental awareness of consumers and the regulation of governments drive supply chain members to collaborate in emission reduction. Considering reference emission and cost learning effects, this study investigates a Stackelberg differential game, where a manufacturer acts as a leader and determines the wholesale price and emission reduction level and a retailer acts as a follower and sets the retail price. Equilibrium emission reduction and pricing strategies in cost- and revenue-sharing contracts are deduced from modelling these two collaboration modes. Results demonstrate that the manufacturer and the entire supply chain prefer the revenue-sharing contract rather than the cost-sharing one, whereas the retailer prefers only the wholesale price contract. High ratios in revenue-sharing contract lead to low emission levels and prices and hence benefit consumers. The environmental awareness of consumers and tax rates considerably affect the emission reduction, but learning effect does not. However, the high learning ability of the manufacturer can improve the performance of supply chain members.

A Study on Decision-making of Low Carbon Supply Chain under Dual Constraint of Capital and Carbon Emission

A Study on Decision-making of Low Carbon Supply Chain under Dual Constraint of Capital and Carbon Emission

Vehicle routing analyses with integrated order picking and delivery problem under carbon cap and trade policy

PurposeThe purpose of this study is to model a vehicle routing problem with integrated picking and delivery under carbon cap and trade policy. This study also provides sensitivity analyses of carbon cap and price to the total cost.Design/methodology/approachA mixed integer linear programming (MILP) model is formulated to model the vehicle routing with integrated order picking and delivery constraints. The model is then solved by using the CPLEX solver. Carbon footprint is estimated by a fuel consumption function that is dependent on two factors, distance and vehicle speed. The model is analyzed by considering 10 suppliers and 20 customers. The distance and vehicle speed data are generated using simulation with random numbers.FindingsSignificant amount of carbon footprint can be reduced through the adoption of eco-efficient vehicle routing with a marginal increase in total transportation cost. Sensitivity analysis indicates that compared to carbon cap, carbon price has more influence on the total cost.Research limitations/implicationsThe model considers mid-sized problem instances. To analyze large size problems, heuristics and meta-heuristics may be used.Practical implicationsThis study provides an analysis of carbon cap and price model that would assist practitioners and policymakers in formulating their policy in the context of carbon emissions.Originality/valueThis study provides two significant contributions to low carbon supply chain management. First, it provides a vehicle routing model under carbon cap and trade policy. Second, it provides a sensitivity analysis of carbon cap and price in the model.

Optimal Decision-Making of Low-Carbon Supply Chain Incorporating Fairness Concerns

Abstract The optimal decision-making of the low-carbon supply chain incorporating fairness concerns, such as the effort of reducing carbon emissions, the whole sale price and retail price, is analyzed by taking the Nash bargaining solution as the fairness reference point. The following conclusions are found. Firstly, the wholesale price is strongly influenced by the fairness concern of the manufacturer but weakly influenced by that of the retailer, although both statistically significantly. Secondly, both the manufacturer’s and retailer’s fairness concerns reduce carbon emissions dramatically to nearly the same extent. Thirdly, the effect of the manufacturer’s fairness concern on the retail price is so tiny that it can almost be ignored, while the retailer’s fairness concern changes the retail price remarkably.

Advertising cooperation of dual-channel low-carbon supply chain based on cost-sharing

PurposeThis paper aims to analyze the impact of the cost coefficient of product emission reduction, coefficient of low-carbon product advertising effort cost, and sharing ratio of low-carbon product advertising effort cost on the profit of a dual-channel supply chain. After determining the best model and relevant influencing factors, the paper puts forward corresponding management inspirations and suggestions.Design/methodology/approachThe paper opts for an exploratory study using Stackelberg game theory to construct a centralized decision-making (MC mode), a low carbon product advertising effort cost free sharing decentralized decision-making (SD model) and a low carbon product advertising effort cost sharing decentralized decision-making (JD model) game model. Through using optimization methods to get the equilibrium solution, the relevant management suggestions are obtained by comparison analysis.FindingsThe paper shows that the JD model is better than the SD model in terms of the profits of the manufacturer, retailer and supply chain, and the improvement of Pareto is realized. The proportion of cost sharing of low carbon product advertising effort is positively related to the wholesale price and direct influence coefficient of low carbon product advertising effort on channel, while negatively related to the retail price and the cross influence coefficient of low carbon product advertising effort on alternative channels. Under the JD model, the manufacturer can reduce advertising costs through improving the efficiency and pertinence of direct channel advertising and urging the retailer to do a better job in sales management to improve gross margin and require the retailer to increase advertising efficiency and pertinence of retail channel to reduce advertising costs of retail channel and other ways to increase their profits. The retailer can make use of its advantages closer with consumers to improve the efficiency and pertinence of advertising in the retail channel to raise the influence coefficient of advertising and reduce the advertising cost in the retail channel.Originality/valueThe innovations of this paper are listed as follows: First, it has considered advertising investment from both the manufacturer and the retailer simultaneously. Second, it has considered a low-carbon background to investigate cooperative advertising decision for low-carbon products. Third, it has considered the decision on the level of product emission reduction and the level of low-carbon product advertising effort investment simultaneously.

The Stability and Complexity Analysis of a Low-Carbon Supply Chain Considering Fairness Concern Behavior and Sales Service.

This paper studies a low-carbon dual-channel supply chain in which a manufacturer sells products through the direct channel and traditional channel, and a retailer sells products through the traditional channel. The manufacturer considers carbon emission reduction and has fairness concern behavior. The retailer provides sales service in the traditional channel and considers fairness concern behavior. The objective of this paper is to analyze the effects of different parameter values on the price stability and utility of the supply chain system emphatically using 2D bifurcation diagram, parameter plot basin, the basins of attraction, chaos attractor and sensitivity to the initial value, etc. The results find that the retailer’s fairness concern behavior shrinks the stability of the supply chain system more than that of the manufacturer’s fairness concern behavior. The system stability region decreases with the increase of carbon emission reduction level and the retailer’s fairness concern. The customers’ preference for the direct channel decreases the stable range of the direct channel, while it enlarges the stable range of the traditional channel. The supply chain system enters into chaos through flip bifurcation with the increase of price adjustment speed. In a stable state, the manufacture improving customer’s preference for the direct channel and the retailer choosing the appropriate fairness concern level can achieve the maximum utility separately. In a chaotic state, the average utilities of the manufacturer and retailer all decline, while that of the retailer declines even more. By selecting appropriate control parameter, the low-carbon dual-channel supply chain system can return to a stable state from chaos again. The research of this paper is of great significance to price decisions of participants and supply chain operation management.

Low-Carbon Initiatives of Logistics Service Providers: The Perspective of Supply Chain Integration

Logistics service providers (LSPs) are under tremendous pressure in the fight against global climate change. While existing research has examined the operational importance of LSPs in decarbonizing supply chains, the strategic perspective of LSPs on low carbon supply chains has not received enough attention. Motivated by the evolving role of LSPs from a service provider to a resource integrator in the supply chain, drawing on the relational view of inter-organizational competitive advantage, this paper focuses on LSPs’ low-carbon supply chain integration (SCI) and empirically investigates its drivers and outcomes. Data from 124 Chinese LSPs shows that LSPs’ corporate environmental responsibility and customer environmental requirement have positive relationships with LSPs’ low-carbon SCI, and that LSPs’ low-carbon SCI is positively related to LSPs’ environmental and financial performance. In addition, LSPs’ environmental performance is found to have a positive relationship with LSPs’ financial performance. These findings not only provide new insights for LSPs’ low-carbon supply chain initiatives, but also highlight the importance of SCI as a strategic approach in low-carbon supply chain management.

Coal-Electric Power Supply Chain Reduction and Operation Strategy under the Cap-and-Trade Model and Green Financial Background

For reliving the pressure of air pollution and corresponding the sustainability development policy in China, the companies are urging the creation of a highly productive low-carbon supply chain. This work uses price regulation, the cap-and-trade model, and a green financial policy background to establish a strategy for the coal–electric power supply chain with two-level carbon reduction and operation with financial constraints. A Stackelberg model was built to help investigate the rate of thermal order realization, the carbon reduction strategy in the coal enterprise, and the amount of thermal energy ordered in the electric enterprise. Results show that under a green financial background, a high bank loan discount rate for investing in carbon reduction technology equates to large carbon reduction in coal enterprises, large quantities of thermal energy ordered in electric enterprises, and high profit for coal and electric enterprises. However, the realization rate of thermal power ordered decreased when the price regulation become strict, thereby reducing the profit and carbon emission in electric enterprise. Therefore, the thermal price regulation level increased, the profit on both company and the production did not respond with sensitivity, and the government could encourage a low carbon model by controlling the bank loan rate.

Evolutionary game theoretic analysis on low-carbon strategy for supply chain enterprises

The focus of this research is evolutionary low-carbon supply chain enterprise behavior and the strategic issues associated with government low-carbon policies and the emerging low-carbon market. A two-level supply chain consisting of a retailer and a manufacturer is established. A Stackelberg game approach employed to solve four retailer and manufacturer low-carbon strategy combinations, after which these strategies are further analyzed using an evolutionary theoretical game approach, from which an evolutionary stability strategy (ESS) is determined. The ESS indicated that: 1) in the low-carbon technology development stage, only one player (the manufacturer or the retailer) should employ low-carbon behavior; and 2) in the advanced low-carbon technology stage, only the retailer should employ low-carbon behavior. These positive results achieved economic, environmental and social Pareto improvements that complied with the government low-carbon requirements, catered to the low-carbon consumer demand, and improved supply chain economic and environmental performances. Finally, the impact of the changes from the government low-carbon policies, consumer sensitivities, and retailer carbon financing interest/subsidy rates on the ESS were analyzed, from which it was found: 1) the government could encourage enterprises to reduce carbon emissions by controlling carbon prices rather than imposing a carbon cap; 2) the enterprises need to focus on consumer sensitivities as the increase of these will reduce the long-term operational carbon emissions; and 3) retailers could stabilize the evolutionary supply chain system by lowering the carbon financing interest rate.

Study of game models and the complex dynamics of a low-carbon supply chain with an altruistic retailer under consumers’ low-carbon preference

This paper incorporates the retailer’s altruistic behavior into the low-carbon supply chain considering consumers’ low-carbon preference and establishes the Stackelberg game model and the vertical Nash game model from the perspectives of a static game and a dynamic game, respectively. First, the static analytical solutions of two models are obtained. Second, we explore the impacts of the retailer’s preference for altruism, consumers’ low-carbon preference and decision parameters on the complex nonlinear dynamic behaviors of the two models. The results show that the retailer’s altruistic behavior and consumers’ low-carbon preference narrow the stability region of the system. In the two game models, the retailer’s altruistic behavior always benefits the manufacture, but it is not good for the retailer; it is either beneficial to or not conducive for the whole supply chain. It is easier to make the system lose stability by accelerating the price adjustment parameter than by adjusting the carbon emission rate parameter. The higher adjustment parameter is even worse for the leader (the manufacturer) in the Stackelberg game, while in the vertical Nash game it is worse for the retailer. In addition, in the dynamic Stackelberg game, we are very surprised to find that a moderate consumer low-carbon preference is beneficial, but an excessive consumer low-carbon preference is not conducive to decision makers.

Research on reliability of Internet of Things RFID based on improved random hash protocol and cooperative game in low-carbon supply chain environment

With the maturity of RFID technology and the rapid development of mobile intelligent terminals, the Internet of Things (IOT) has attracted more and more attention and will become another revolution after the Internet. However, compared with traditional Internet applications, Internet of Things applications supported by RFID devices and intelligent terminals have more complex and serious security problems. For example, trust mechanism and malicious behavior detection have become the key issues to be solved in the construction of secure and trusted Internet of Things. The in-depth analysis and research of trust mechanism is of great significance to improve the security of the infrastructure of the Internet of Things and even the whole security system of the Internet of Things. Aiming at the relevant requirements of Internet of Things credibility in low-carbon supply chain environment, this paper proposes an improved random hash protocol and assistant game-based RFID credibility of Internet of Things. Combining with random oracle model security theory (ROM), experiments are carried out with data. A collaborative game method is proposed. Through collaboration with intra-agency nodes, inconsistent nodes and their observations are analyzed. Experiments show that simple game and cooperative game can effectively suppress malicious attacks in normal networks and malicious node–dominated networks, respectively. The protocol achieves the advantages of access authentication, anonymity security, anti-retransmit, anti-traceability, data accountability, time-scaling, and cost-effectiveness, and can effectively enhance the credibility of the Internet of Things in a low-carbon supply chain environment.

Life cycle CO2 emissions from power generation using hydrogen energy carriers

Hydrogen energy carriers such as liquid hydrogen (LH2), methylcyclohexane (MCH), and ammonia (NH3) are promising energy vectors in the clean energy systems currently being developed. However, their effectiveness in mitigating environmental emissions must be assessed by life cycle analyses throughout the supply chain. In this study, while focusing on hydrogen energy carriers, life cycle inventory analyses were conducted to estimate CO2 emissions from the following types of power generation plants in Japan: a hydrogen (H2) mono-firing power plant using LH2 or MCH that originated from overseas renewable electricity; and NH3 co-firing with fossil fuel and NH3 mono-firing power plants using hydrogen energy carriers that originated from overseas natural gas or renewable electricity. Parameters related to the supply chains were collected by literature surveys, and the Japanese life cycle inventory database was primarily used to calculate the emissions. From the results, CO2 hotspots of the target supply chains and potential measures are identified that become necessary to establish low-carbon supply chains.

Comparison of Carbon Emission Reduction Modes: Impacts of Capital Constraint and Risk Aversion

The need for low-carbon development has become a social consensus. Increasing numbers of enterprises implement carbon emission reduction by using carbon cap-and-trade mechanisms to cater to consumers and practice social responsibility. From the manufacturer’s perspective, they can implement carbon emission reduction investment by themselves or outsource it to the retailer or energy service company (referred as ESCO). To explore the best carbon emission reduction mode selection strategy, we built and compared three carbon emission reduction modes—manufacturer emission reduction, retailer emission reduction, and ESCO emission reduction—by using Stackelberg game models. The joint decisions of operation, finance, and environment were obtained by using the backward induction approach. The impacts of key parameters were analyzed, such as the retailer’s initial capital amount and the decision-makers’ risk aversion degree on the low carbon supply chain operation. Our results show that the optimal carbon emission reduction mode for the manufacturer is changed as the retailer’s initial capital amount changes. Carbon emission reduction by the ESCO (retailer) becomes the dominant strategy for both the economy and environment when the cost advantage (cash investment ratio) of the ESCO (retailer) carbon emission reduction mode is sufficiently high (low). Overall, decision-makers’ risk aversion is detrimental to both the economic and environmental developments of the supply chain. We also designed contracts to realize the coordination of risk-neutral, risk-averse, capital-adequate, and capital-constrained low-carbon supply chains. These results give guidance for decision-makers to better manage the low-carbon supply chain in the context of fully considering the influential factors of risk aversion and capital constraint.

Low Carbon Supply Chain Coordination for Imperfect Quality Deteriorating Items

Nowadays, many countries have implemented carbon pricing policies. Hence, the industry adapts to this policy while striving for its main goal of maximizing financial benefits. Here, we study a single manufacturer–retailer inventory decision considering carbon emission cost and item deterioration for an imperfect production system. This study examines two models considering two cases of quality inspection. The first is when the buyer performs the quality inspection, and the second is when the quality inspection becomes the vendor’s responsibility so that no defective products are passed to the buyer. Carbon emission costs are incorporated under a carbon tax policy, and we consider the carbon footprint from transporting and warehousing the items. The objective is to jointly optimize the delivery quantity and number of deliveries per production cycle that minimize the total cost and reduce the total carbon emissions. This study provides solution procedures to solve the models, as well as two numerical examples.

Effects of low carbon supply chain practices on environmental sustainability

PurposeThe purpose of this paper is to empirically examine the relationships between low carbon supply chain practices and their relationships with environmental sustainability (ES) and the economic performances (EP) of firms. The study also includes an examination of the low carbon supply chain practices that are utilized by Indian manufacturing firms.Design/methodology/approachThrough a questionnaire-based survey, the data received from 83 Indian manufacturing firms was analyzed using a variance-based structural equation modeling technique to test the proposed hypotheses.FindingsThe study indicates that carbon governance is a strategic imperative for the adoption of low carbon supply chain practices. Similarly, low carbon product and process design (LCPPD), manufacturing and logistics lead to improved ES. In addition, low carbon purchasing is positively related to the adoption of LCPPD, manufacturing and logistics. No significant relationship was found between the adoption of low carbon supply chain practices and the EP of a firm.Practical implicationsThe findings of this study may assist manufacturing managers in prioritizing operational practices for the reduction of emissions.Originality/valueThis study provides two major contributions to green supply chain management. First, it provides comprehensive empirical evidence on low carbon supply chain practices that are being followed by Indian manufacturing firms. Second, this study also empirically validated a structural model of low carbon supply chain practices.