Product Green Degree Research Articles

Optimal government and manufacturer incentive contracts for green production with asymmetric information.

Governments commonly utilize subsidy policy to incentivize manufacturers to produce green products, promoting sustainable development. However, in the presence of information asymmetry, some manufacturers may dishonestly misrepresent the green degree of their products to secure higher subsidies. This study examines different incentive contracts between the government and a green product manufacturer who keeps private information of a product's green-degree in a principal-agent model. Lump-sum transfer and fixed- and flexible-proportion benefit-sharing contracts are proposed to investigate screening and improving green-degree issues. To further enhance the flexible-proportion benefit-sharing contract, we construct a non-linear coordinated contract based on the Nash bargaining solution. The revelation principle and Nash bargaining are performed for comparison and analysis of the contracts. We find that the lump-sum contract reveals true green-degree information but fails to impel manufacturers to improve product's green-degree in developing countries where green product development is in initial stages. In contrast, both fixed- and flexible- proportion benefit-sharing contracts are effective in reveling and enhancing green-degree. The non-linear coordination contract optimizes resource allocation and achieves Pareto improvement. An applied case study for inkjet printer operations and numerical experiments corroborate our model findings.

Effect and formulation of ecolabel policy: A perspective of green supply chain decision and coordination.

Ecolabel policy has become an important strategy to encourage the consumption of green products throughout the world, contributing to sustainable development which is an inevitable choice for human society. Considering the manufacturer's reputation, consumer's environmental awareness, and effects of ecolabel certification on product demand, this study proposes several Stankelberg game models containing one manufacturer and one retailer to compare the optimal decisions and the impacts on the green supply chain with/without ecolabel certification, where four different scenarios are investigated in the centralized and decentralized situations. The results indicate that the ecolabel policy only functions below a threshold associated with the consumer's environmental awareness, which is higher in the decentralized situation. On the contrary, the optimal ecolabel standard in the centralized decision-making situation is higher than that in the decentralized ones if maximizing the environmental benefit. For the manufacturer, only when producing products as the ecolabel standard can it get the optimal profit. Finally, a wholesale price contract with the manufacturer's reputation is proposed, which improves the product's green degree and the environmental benefit to the optimal level in a decentralized supply chain.

Research on Green Closed-Loop Supply Chain Considering Manufacturer’s Fairness Concerns and Sales Effort

To reduce resource loss and environmental pollution, green CLSC has become a hot issue that manufacturing enterprises pay attention to. In green CLSC, manufacturers would pay attention to the fairness of profit distribution when making sales efforts. Therefore, this paper studies a green closed-loop supply chain (CLSC) considering manufacturer sales efforts and fairness concerns. Then, the centralized model and decentralized model are built and analyzed. Afterward, a profit-sharing contract between members is designed to coordinate the supply chain. We made the following observations: (1) The manufacturers’ fairness concerns would reduce product green degree, sales effort and recycling rate of used products, which is not conducive to the sustainable development of the green closed-loop supply chain. (2) When the manufacturers’ fairness concerns are gradually strengthened, the optimal decisions would deviate even more from the optimal equilibrium results. (3) When the coefficient of fairness concerns and the ratio of profit-sharing satisfy a certain range, Pareto improvement can be effectively realized.

Green Investment Decision and Coordination in a Retailer-Dominated Supply Chain Considering Risk Aversion

With the sustainable development of the global economy, environmental problems and the green economy are increasingly becoming points of concern for the community. However, the large amount of capital invested in green technology and the high price of green products have become the key problems hindering the development of a risk-averse green supply chain. In order to promote the supply chain to increase green investment level, improve the green degree of products, and reduce the impact of risk aversion on green investment, this paper studies a two-echelon green supply chain composed of a risk-averse manufacturer and a risk-neutral retailer, in which the retailer is the leader and the manufacturer is the follower. We construct the wholesale price contract model, cost-sharing contract model, and two-part contract model, respectively, and use the Optimization Theory and Methods to discuss the impact of the three contracts on the green degree, expected utility of supply chain, retail price, consumer surplus, and social welfare. The results show that in the cost-sharing contract, compared with the wholesale price contract, the green degree of the product has been significantly improved, but the expected utility of the supply chain enterprises cannot achieve Pareto improvement, and the higher consumer environmental awareness will cause the manufacturer’s expected utility to decline. In the two-part tariff contract, compared with the wholesale price contract, the expected utility of supply chain enterprises achieves Pareto improvement, and the green degree of products is the highest in the three contracts; more importantly, in the two-part contract, the product green degree, the retail price, and the expected utility of the supply chain are not related to the manufacturer’s risk aversion; meanwhile, the retail price in the two-part tariff is the lowest among the three contracts, and the consumer surplus and social welfare are the highest. Our main contribution is that the two-part contract eliminates the influence of the manufacturer’s risk aversion on the above decision variable and realizes the unification of manufacturers, retailers, consumers, and social benefits. Finally, this paper uses numerical examples to verify the above conclusions and then analyzes the sensitivity of the supply chain system.

Strategic investment for green product development and green marketing in a supply chain

Growing environmental awareness among consumers and corporate environmental responsibility prompt enterprises to pay more attention to green operations. Green practices, such as green product development (GPD) and green marketing strategies, affect the sustainability of a supply chain. This paper considers four scenarios to determine who is more suitable to implement GPD or green marketing in a supply chain consisting of a manufacturer and a retailer regarding products with green attributes. Several findings are derived. First, there is a significant interaction between GPD and green marketing decisions. These two important decisions should be considered simultaneously in a supply chain. Second, when the green marketing cost factor is sufficiently high, the manufacturer, retailer, whole supply chain, environment, and consumers will benefit from the scenario where the manufacturer leads in both GPD and green marketing, which may explain the common practice of the manufacturer conducting both GPD and green marketing. From the retailer's perspective, adopting both GPD and green marketing is always a bad choice. The environmental impact and consumer surplus are also investigated. For improving the environment and enhancing consumer surplus, it is best to enhance consumers' awareness of a product's green degree and enable the consumers to derive more positive utility from green marketing.

Financial hedging in two-stage sustainable commodity supply chains

This paper studies the optimal financial hedging strategy and sustainable development in four supply chain structures. To help manufacturers reasonably hedge the risks caused by the fluctuation of input commodity prices, we use an index-based price contract by which manufacturers can transfer part of their risk to downstream retailers and realize risk-sharing in the supply chain. We discuss the optimal hedging strategy and the product's green degree in four structures: monopoly (manufacturer sets contract), monopoly with Nash bargaining, retailer competition, and manufacturer competition. Our model follows two-stage Stackelberg game, which delivers us the results that the hedge ratio is positively related to the consumer's preference for green products but is inversely related to the green product research and development costs. Interestingly, in the manufacturer competition supply chain, the profits of both manufacturers increase significantly when the input commodity price fluctuates slightly, but as that fluctuation continually increases, the profit of one manufacturer declines, while the profit of the other rises slowly. Considering another perspective, green degree competition harms the profits of the manufacturers and the retailer, as well as decreasing the green degree.

An evolutionary analysis of low-carbon technology investment strategies based on the manufacturer-supplier matching game under government regulations.

Developing a low-carbon economy is the only way for countries to achieve sustainable development. Carbon emission reduction policies and low-carbon technology (LCT) innovation play key roles in developing low-carbon economy. Under government reward and punishment regulations, based on the bilateral matching and evolutionary theories, this paper constructs an evolution model consisting of a manufacturer investing LCT and a supplier offering LCT to analyze multi-phase LCT investment strategies. Firstly, the profit optimization model of a green supply chain is constructed from the perspectives of centralized-matching (CM), decentralized-matching (DM), and mismatching (MM), and the spatial information internal evolution law of multi-phase LCT investment is described by the Markov chain. Then, a bilateral matching algorithm is proposed to solve the equilibrium solutions, and the evolution process of the three modes is analyzed by numerical simulation. Finally, based on the product green degree, we analyze the impact of subsidies and taxes on investment-production decisions. Analytical results show that the matching mechanism proposed in this paper can help supply chain firms to obtain stable matching and has a significant effect on the realization of "triple wins" of society, economy, and environment. The investment utility of CM is higher than that of DM and MM. Manufacturers are inclined to adopt LCT, and the investment level tends to be stable over time. Government reward and punishment regulations are helpful to motivate supply chain firms to invest in LCT, and the synergistic effect of subsidies and taxes is better than that of a single policy.

Green Supply Chain Management with Nash Bargaining Loss-Averse Reference Dependence

This paper investigates a two-echelon green supply chain (GSC) with a single loss-averse manufacturer and a single loss-averse retailer. Since the Nash bargaining solution exactly characterizes endogenous power and the contribution of the GSC members, it is introduced as the loss-averse reference point for the GSC members. Based on this, a decision model of the two-echelon GSC with loss aversion is formulated. The optimal strategies of price and product green degree are derived in four scenarios: (a) the centralized decision scenario with rational GSC members, namely the CD scenario; (b) the decentralized decision scenario with rational GSC members, namely the DD scenario; (c) the decentralized decision scenario with the GSC members loss-averse, where the manufacturer’s share is below its own loss-averse reference point, namely the DD(∆m ≥ πm) scenario; (d) the decentralized decision scenario with the GSC members loss-averse, where the retailer’s share is below its own loss-averse reference point, namely the DD(∆r ≥ πr) scenario. Then, a comparative analysis of the optimal strategies and profits in these four scenarios is conducted, and the impacts of loss aversion and green efficiency coefficient of products (GECP) on the GSC are also performed. The results show that (i) GECP has a critical influence on the retail price and the wholesale price; (ii) the GSC with loss aversion provide green products with the lowest green degree; (iii) the retail price, the wholesale price and product green degree are decreasing monotonically with the loss aversion level of the GSC member without incurring loss; (iv) furthermore, the effect of the loss aversion level of the GSC member with incurring loss on the optimal strategies is related to GECP and the gap between the GSC members’ loss aversion levels.

Green Credit Financing Equilibrium under Government Subsidy and Supply Uncertainty

In this paper, we study the green credit financing equilibrium in a green supply chain (GSC) with government subsidy and supply uncertainty. The GSC system is composed of one manufacturer, two retailers, one bank, and the government. The manufacturer is subject to both supply uncertainty and limited capital. The manufacturer invests in the R&D of green products and borrows loans from the bank. The government subsidizes banks to encourage banks to provide loans to manufacturers with lower interest rates, which is termed “green credit financing”. The two retailers decide their order quantities with horizontal competition or horizontal cooperation. We first developed a Stackelberg model to investigate the green credit financing equilibriums (i.e., the interest rate of the bank, the manufacturer’s product green degree and wholesale price, and the retailers’ order quantity) under horizontal competition and horizontal cooperation, respectively. Subsequently, we analyzed how the subsidy interest rate, supply uncertainty, and supply correlation affect financing decisions regarding equilibrium green credit. We found that a high subsidy interest rate leads to a low interest rate of bank and the manufacturer can set a high level of green product and high wholesale price, while the retailers can set a high order quantity. Finally, we compared the green credit financing equilibriums under horizontal competition with those under horizontal cooperation using numerical and analytical methods. We found that, in general, the optimal decisions and profits of bank and SC members, consumer surplus, and social welfare under horizontal competition are higher than those under horizontal cooperation. The findings in this research could provide valuable insights for the management of capital-constrained GSCs with government subsidies and supply uncertainty in a competing market.

Research on Reward and Punishment Contract Model and Coordination of Green Supply Chain Based on Fairness Preference

With the increasing demand for “green” goods, it is necessary for companies to develop green innovation to seize market opportunities. Companies often use the model of supply chain cooperation to carry out green innovation. The standard reward and punishment contract model is constructed based on the green degree of the product provided by the supplier when the manufacturer has a fair preference. The impact of the manufacturer’s fairness preference on the green degree of the product, price, manufacturer’s profit, supplier’s profit, and overall profit when the product green degree standard provided by the supplier is greater or smaller than the manufacturer’s demand standard is analyzed. The impact of the difference in channel power between manufacturers and suppliers is also analyzed on the overall profit of the green supply chain. The research results showed that when the manufacturer’s attention to fairness is equal to the attention to self-interest, the overall profit of the green supply chain is the largest, the coordination of the supply chain can be achieved, and the difference in the channel power of the participants in the green supply chain has a significant impact on the overall profit, which is verified by numerical analysis.

Differential game model and coordination model for green supply chain based on green technology research and development

The purpose of this paper is to establish a green supply chain differential game model for green technology research and development based on a secondary green supply chain composed of a single manufacturer and a single retailer. It compares the differential game equilibrium solutions under centralized and decentralized decision-making. The green supply chain members are coordinated through the dynamic wholesale price mechanism, and numerical simulation is used as a methodology, to verify and explain the results. The study found that compared to decentralized decision-making, the level of green technology and the total profit of green channels are higher under centralized decision-making. When the coordination parameters are within a certain range, the dynamic wholesale price mechanism can coordinate the behavior of manufacturers and retailers. The result also discovers that under the dynamic wholesale price mechanism, with the increase of investment cost coefficient, or the increase of price sensitivity or the decrease of consumer's environmental awareness, the green technology level, product green degree, price, retailer's profit, and the total profit of green channel is decreased. In contrast, the wholesale price and manufacturer's profits are increased.

Pricing rules of Green Supply Chain considering Big Data information inputs and cost-sharing model

Big Data provide an opportunity for decision makers to implement green production and order plans with accurate and timely consumer demand information. Thus, many enterprise begun to invest in consumer preference information based on big data (CPIBD) and green production technology. These will add their extra costs, and cost-sharing model is an effective way to improve chain members’ benefits. However, in the new environment, how to price can improve their outcomes in different cost-sharing models? And which model is the best? Aims of this paper are to solve the proposed issues considering CPIBD input and the green technology R&D cost. We chose a green supply chain with one green manufacturer and one retailer as study subject. Then, based on game theory, we proposed three cost-sharing models, and their benefit functions were developed. Using the reverse induction, we analyzed and discussed the change rules of the retail price and the wholesale price with the product green degree and the unit CPIBD cost. Then, using Matlab2014, a numerical example based on actual data was implemented. Findings: (1) with the increase of the unit CPIBD cost, the optimal retail prices will grow in the proposed three models, and the change trend of the wholesale price has a relationship with the situation whether the retailer undertakes the unit CPIBD cost or the green technology R&D cost. (2) With the growth of the product green degree, the optimal retail price and the optimal wholesale price in the three models will decrease. (3) With the increase of the unit CPIBD cost and the product green degree, benefits of supply chain members in the proposed three models will reduce. If the retailer can undertake the unit CPIBD cost or the green technology R&D cost, benefits of supply chain will be higher.

Optimal decisions and Pareto improvement for green supply chain considering reciprocity and cost-sharing contract.

With the rapid development of green consumption demand, more and more consumers choose to purchase green products. Incorporating consumers' environmental awareness into a green supply chain, this paper studies the decisions and coordination of the green supply chain under the retailer's reciprocal preference. The decentralized models with and without reciprocity are constructed and analyzed with consideration of product green degree and pricing. Then, the cost-sharing joint commission contract is proposed to realize Pareto improvement. Finally, propositions and conclusions are verified by numerical simulation. The results indicate that improving consumers' environmental awareness is favorable to the profit of the whole supply chain and environment. Besides, within the reasonable range of retailer's reciprocal preference, higher value of the retailer's reciprocal preference is conductive to the better realization of environmental protection and the improvement of the economic welfare of the whole society. The cost-sharing contract exerts a positive effect in improving the environmental and economic performance in the green supply chain (GSC). The paper provides a theoretical foundation for the design of cooperative contracts in the GSC, especially the GSC with retailer's reciprocal preference.

How Government Regulations and Consumer Behavior Influence Manufacturers’ Product Green Degree Decision‐Making: An Agent‐Based Model

In recent years, green product issues have received increasing attention. Both government regulations and consumer behaviors have a strong influence on the product green degree decisions of manufacturers’ products. In order to find how government regulations and individual’s green product purchase behavior affect manufacturers’ green degree decisions and the market evolution characteristics, this paper proposes a multiagent model that considers the interaction among government, consumers, and manufacturers. The simulation results show that, firstly, the product green degree decision‐making of manufacturers needs the guidance and regulation of the government. Secondly, product price subsidies are the most effective way to affect the manufacturers’ product green degree decisions. In contrast to giving green cost subsidies to manufacturers, the government employs various publicity means to improve the environmental awareness of consumers is also an effective way to enhance the green degree of manufacturers’ products. Thirdly, there is a “Crowding Out Effect” on the other qualities of manufacturers’ products when manufacturers focus on the green degree of their products.

Research on Game Strategy of Green Supply Chain under Different Subsidy Policies

This paper discusses the retailer-manufacturer Stackelberg model under the background of green supply chain. The manufacturer needs to decide product green degree and the retailer needs to determine green promotion levels. This study considers the optimal decision-making, profit and social welfare of each member of the supply chain under the three decision scenarios: government does not subsidize, government subsidizes manufacturers, and government subsidizes retailers, in order to provide reference for the government to promote the implementation of green supply chain strategies. The results show that government subsidies have a positive effect on the implementation of green supply chains. Moreover, the government's strategy of subsidizing manufacturers will improve the product green degree, social welfare, and the profits of manufacturers and retailers. And the strategy of subsidizing manufacturers is shown to be better through comprehensive analysis. When consumers' preference for green products is low, the green promotion level is highest when retailers are subsidized, but the unit subsidy gain of social welfare is greater when manufacturers are subsidized.

Product green degree, service free-riding, strategic price difference in a dual-channel supply chain based on dynamic game

In this paper, we study a green product dual-channel supply chain with a manufacturer and a retailer. The service free-riding is considered, and the channel price difference is also introduced as a strategic tool to adjust the channel conflict. In centralized and decentralized models, we give the optimal decisions of the supply chain members and analyse the effects of the service free-riding and the price difference on the related decisions. In order to coordinate the dual-channel green supply chain, we also design a two-part tariff contract coordination model, which allows both the manufacturer and the retailer to obtain a win–win result. From the analytical and numerical results, we find that the proper service free-riding degree and price difference are beneficial to the decision makers and the greening of supply chain. And in the centralized model, when the degree of service free-riding is small, the increase of the channel price difference can stimulate the manufacturer to provide the lower price product with lower service and green degree, otherwise, it is the opposite. Besides, the result also shows that, except for consumers, the centralized model always performs better than the decentralized model in the profit and social welfare aspects.

Decisions and coordination of green e-commerce supply chain considering green manufacturer's fairness concerns

With the rapid development of the cyber economy and green consumption demand, more and more consumers choose to purchase green products through e-commerce platforms. Considering the product green degree and the e-commerce platform's service, the paper studies the decisions and coordination of green e-commerce supply chain under green manufactures’ fairness concerns. The centralised model and the decentralised models with and without fairness concern are constructed and analysed with consideration of product green degree and service level. Then, the ‘cost-sharing joint commission’ contract is proposed to realise system coordination. Finally, propositions and conclusions are verified by numerical simulation. The results indicate that unlike traditional offline and dual-channel supply chains, the manufacturer's behaviour in response to fairness concerns can result in the decline both in product green degree and system efficiency but has no impact on service level. Under the centralised model, the product green degree is not the highest but is more affected by consumers’ green preferences. In addition, the product price and the service level will reach the highest under the centralised model. The increase in green technology investments can downsize the feasible interval of the contract, and the consumers’ green preferences can extend the feasible interval.

Multinational companies’ coordination mechanism for extending corporate social responsibility to Chinese suppliers

From the global supply chain perspective, this research explores how multinational companies (MNCs) can extend corporate social responsibility (CSR) practices to emerging countries such as China. A two-stage supply chain game model consisting of a Chinese supplier and a MNC is constructed. The study finds that an increase in the level of the Chinese supplier’s CSR increases the product demand and the stakeholders’ economic profits, but reduces the supplier’s economic return; the product demand and the stakeholders’ benefits increase along with the product green degree improvement, but the changes in the Chinese supplier’s economic profits are jointly affected by the level of CSR and green production efficiency. The supply chain coordination can be achieved based on a revenue sharing contract. Finally, the effects of revenue sharing fraction and supplier’s CRS level on product green degree, supplier’s revenue and MNC’s earnings are discussed by numerical simulation.

Optimal Decisions of a Green Supply Chain under the Joint Action of Fairness Preference and Subsidy to the Manufacturer

Government subsidy promotes the development of green supply chain, and the influence of decision-makers’ behavioral preferences becomes increasingly prominent in green supply chain management. In order to further enrich the research content of green supply chain, we first use Stackelberg game theory to construct game models by taking the product green degree, wholesale price and retail price as the decision variables, then we work out the equilibrium strategies of the manufacturer and the retailer under four decision scenarios, and reveal the impact differences between the two parties’ fairness preference behaviors. Our research mainly has the following findings: Firstly, the government subsidy to the manufacturer can benefit these two parties and can have certain impact on the optimal decisions only by working with the green product market expansion efficiency. Secondly, these two parties’ fairness preference behaviors can cause serious damage to the other party’s profit and the overall profit of green supply chain, and increase the rate of their own profit in the overall profit of green supply chain, but the difference is that the retailer’s fairness preference behavior can cause a greater decline in product green degree and wholesale price, and when certain conditions are met, its own profit may rise compared to its fairness neutral, while the manufacturer’s fairness preference behavior can cause a greater damage to the overall profit of green supply chainand make its own profit always be lower than its fairness neutral. Thirdly, the government subsidy to the manufacturer and the fairness preference behaviors of both parties can cause a stack effect on the optimal solutions, which means that the subsidy government provides for the manufacturer can aggravate the negative influence caused by these two parties’ fairness preference behaviors.

Optimal financing and operational decisions of capital-constrained manufacturer under green credit and subsidy

<p style='text-indent:20px;'>To stimulate the capital-constrained manufacturer to produce green products, the government often adopts two incentive mechanisms: green credit (i.e., subsidy offered directly to bank) and subsidy (i.e., subsidy offered directly to manufacturer). This paper examines the optimal interest rate of the bank, and the optimal product green degree and sales price of the manufacturer under the two mechanisms, respectively. Furthermore, we investigate the effects of these mechanisms on the optimal decisions, the profits of players, the social welfare and the environmental benefits. Several important results are obtained. First, when the total government subsidy is low, the green credit mechanism can bring the higher green degree, product sales price and demand, as well as higher profits for the bank and manufacturer, rather than the subsidy mechanism. Otherwise, the result is opposite. Second, the government should adopt the green credit mechanism to support the manufacturer to develop green products when the budget is limited and relatively low. If the government budget is sufficient, the subsidy mechanism is the best choice, which can bring higher economic and environmental benefits.