Decisions and coordination of retailer-led low-carbon supply chain under altruistic preference

Wang, Yuyan; Yu, Zhaoqing; Jin, Mingzhou; Mao, Jiafu

doi:10.1016/j.ejor.2020.12.060

Decisions and coordination of retailer-led low-carbon supply chain under altruistic preference

Journal Article · Mon Jan 04 23:00:00 EST 2021 · European Journal of Operational Research

DOI:https://doi.org/10.1016/j.ejor.2020.12.060· OSTI ID:1823335

Wang, Yuyan ^[1]; Yu, Zhaoqing ^[2]; ^[3]; ^[4]

Shandong Normal University, Jinan (China); Shandong University of Finance and Economics, Jinan (China)
Shandong University of Finance and Economics, Jinan (China)
Univ. of Tennessee, Knoxville, TN (United States)
Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States)

A low-carbon supply chain formed by a dominant retailer and a small and medium-sized manufacturer (SMM) is considered. Because the SMM faces the high cost pressure of adopting carbon emission reduction (CER) technologies, the retailer may take an altruistic preference for the long-term sustainability of the chain. Three decision-making models, centralized, decentralized without altruistic preference, and decentralized with altruistic preference, are constructed to compare decisions and profits of both parties. Since neither decentrailized models can lead to a coordinated solution that is incentive compitable, a coordination contract, referred to as the cost sharing contract with altruistic preference, is proposed. Numerical study shows that the altruistic preference can help increase the SMM's profit and system efficiency but decrease the retailer's profit. The coordination contract requires the retailer to adjust the unit profit and share more than half of the CER cost. Finally, it is found that the wholesale price is the lowest in the coordination contract and the comparison of unit profit depends on the coefficient of CER cost.

View Accepted Manuscript (DOE)

Research Organization:: Oak Ridge National Laboratory (ORNL), Oak Ridge, TN (United States)

Sponsoring Organization:: USDOE Office of Science (SC), Biological and Environmental Research (BER)

Grant/Contract Number:: AC05-00OR22725

OSTI ID:: 1823335

Journal Information:: European Journal of Operational Research, Journal Name: European Journal of Operational Research Journal Issue: 3 Vol. 293; ISSN 0377-2217

Publisher:: ElsevierCopyright Statement

Country of Publication:: United States

Language:: English

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29 ENERGY PLANNING, POLICY, AND ECONOMY
Altruistic preference
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Low-carbon
Retailer-led

Decisions and coordination of retailer-led low-carbon supply chain under altruistic preference

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