Green Supply Chain Decisions Under Different Power Structures: Wholesale Price vs. Revenue Sharing Contract

In the market, once consumers have a low-carbon preference, they will choose green low-carbon products. The market demand for green products is not only related to product price, but also consumers’ low-carbon preference. In this way, enterprise has to consider the cost of carbon emissions in the pr...

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Main Authors: Xiaojing Liu, Wenyi Du, Yijie Sun
Format: Article
Language:English
Published: MDPI AG 2020-10-01
Series:International Journal of Environmental Research and Public Health
Subjects:
Online Access:https://www.mdpi.com/1660-4601/17/21/7737
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spelling doaj-bb75e64f742b4328ba5ddd7756609a862020-11-25T03:06:10ZengMDPI AGInternational Journal of Environmental Research and Public Health1661-78271660-46012020-10-01177737773710.3390/ijerph17217737Green Supply Chain Decisions Under Different Power Structures: Wholesale Price vs. Revenue Sharing ContractXiaojing Liu0Wenyi Du1Yijie Sun2Business School, Jiangsu Normal University, Xuzhou 221116, ChinaBusiness School, Jiangsu Normal University, Xuzhou 221116, ChinaBusiness School, Jiangsu Normal University, Xuzhou 221116, ChinaIn the market, once consumers have a low-carbon preference, they will choose green low-carbon products. The market demand for green products is not only related to product price, but also consumers’ low-carbon preference. In this way, enterprise has to consider the cost of carbon emissions in the process of production and operation. In this paper, we consider a two-level supply chain system composed of a manufacturer and a retailer. The supply chain system can determine the price of products and the level of carbon emission reduction through different supply chain contracts: wholesale price contract and revenue sharing contract. However, the power control structure of a manufacturer and a retailer is different, which will further affect the decision-making strategy of the supply chain system. We set up four models (Wholesale Price—NM and NR, and Revenue-Sharing—SR and SM) of the supply chain with carbon emission reduction, and calculated and analyzed. The results show that firstly, regardless of whether the manufacturer's power control structure or the retailer power structure is dominant, the manufacturer wholesale price with a contract on revenue-sharing is always higher than on wholesale price, and it is inversely proportional to the revenue-sharing proportion. Secondly, under the two power control structures, the carbon emission level of the manufacturer with a contract on revenue-sharing is always lower than on wholesale price, and it gradually decreases with the increase of the revenue-sharing proportion of the manufacturers. Thirdly, when the retailer dominates the supply chain, the retailer selling price with a contract on revenue-sharing is always higher than on wholesale price. Under the manufacturer's power control structure, when the revenue-sharing ratio is small, the retailer selling price with a contract on revenue-sharing is higher than on wholesale price; when the revenue-sharing ratio is large, the retailer selling price with a contract on revenue-sharing is lower than on wholesale price. Finally, the validity of the model is verified by an example, and the sensitivity of the parameters is analyzed.https://www.mdpi.com/1660-4601/17/21/7737green supply chainconsumer preferencepower structureswholesale price contractrevenue-sharing contract
collection DOAJ
language English
format Article
sources DOAJ
author Xiaojing Liu
Wenyi Du
Yijie Sun
spellingShingle Xiaojing Liu
Wenyi Du
Yijie Sun
Green Supply Chain Decisions Under Different Power Structures: Wholesale Price vs. Revenue Sharing Contract
International Journal of Environmental Research and Public Health
green supply chain
consumer preference
power structures
wholesale price contract
revenue-sharing contract
author_facet Xiaojing Liu
Wenyi Du
Yijie Sun
author_sort Xiaojing Liu
title Green Supply Chain Decisions Under Different Power Structures: Wholesale Price vs. Revenue Sharing Contract
title_short Green Supply Chain Decisions Under Different Power Structures: Wholesale Price vs. Revenue Sharing Contract
title_full Green Supply Chain Decisions Under Different Power Structures: Wholesale Price vs. Revenue Sharing Contract
title_fullStr Green Supply Chain Decisions Under Different Power Structures: Wholesale Price vs. Revenue Sharing Contract
title_full_unstemmed Green Supply Chain Decisions Under Different Power Structures: Wholesale Price vs. Revenue Sharing Contract
title_sort green supply chain decisions under different power structures: wholesale price vs. revenue sharing contract
publisher MDPI AG
series International Journal of Environmental Research and Public Health
issn 1661-7827
1660-4601
publishDate 2020-10-01
description In the market, once consumers have a low-carbon preference, they will choose green low-carbon products. The market demand for green products is not only related to product price, but also consumers’ low-carbon preference. In this way, enterprise has to consider the cost of carbon emissions in the process of production and operation. In this paper, we consider a two-level supply chain system composed of a manufacturer and a retailer. The supply chain system can determine the price of products and the level of carbon emission reduction through different supply chain contracts: wholesale price contract and revenue sharing contract. However, the power control structure of a manufacturer and a retailer is different, which will further affect the decision-making strategy of the supply chain system. We set up four models (Wholesale Price—NM and NR, and Revenue-Sharing—SR and SM) of the supply chain with carbon emission reduction, and calculated and analyzed. The results show that firstly, regardless of whether the manufacturer's power control structure or the retailer power structure is dominant, the manufacturer wholesale price with a contract on revenue-sharing is always higher than on wholesale price, and it is inversely proportional to the revenue-sharing proportion. Secondly, under the two power control structures, the carbon emission level of the manufacturer with a contract on revenue-sharing is always lower than on wholesale price, and it gradually decreases with the increase of the revenue-sharing proportion of the manufacturers. Thirdly, when the retailer dominates the supply chain, the retailer selling price with a contract on revenue-sharing is always higher than on wholesale price. Under the manufacturer's power control structure, when the revenue-sharing ratio is small, the retailer selling price with a contract on revenue-sharing is higher than on wholesale price; when the revenue-sharing ratio is large, the retailer selling price with a contract on revenue-sharing is lower than on wholesale price. Finally, the validity of the model is verified by an example, and the sensitivity of the parameters is analyzed.
topic green supply chain
consumer preference
power structures
wholesale price contract
revenue-sharing contract
url https://www.mdpi.com/1660-4601/17/21/7737
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