×

Impact of risk aversion on two-echelon supply chain systems with carbon emission reduction constraints. (English) Zbl 1449.90002

Summary: This study examines a two-echelon supply chain consisting of two competing manufacturers and one retailer that has the channel power, in which one manufacturer is engaged in sustainable technology to curb carbon emissions under the cap-and-trade regulation while the other one operates its business as usual in a traditional manner. Two different supply chain configurations concerning risk attributes of the agents are considered, that is, (i) two risk-neutral manufacturers with one risk-averse retailer; and (ii) two risk-averse manufacturers with one risk-neutral retailer. Under the mean-variance framework, we use a retailer-leader game optimization approach to study operational decisions of these two systems. Specifically, optimal operational decisions of the agents are established in closed-form expressions and the corresponding profits and carbon emissions are assessed. Numerical experiments are conducted to analyze the impact of risk aversion of the underlying supply chains. The results show that each risk-averse agent would benefit from a low scale risk aversion. Further, low carbon emissions could be attainable if risk aversion scale of the underlying manufacturer is small or moderate. In addition, the carbon emissions might increase when risk aversion of the traditional manufacturer or the retailer is of small or moderate scale.

MSC:

90B05 Inventory, storage, reservoirs
90B50 Management decision making, including multiple objectives
91B76 Environmental economics (natural resource models, harvesting, pollution, etc.)
91A05 2-person games
PDFBibTeX XMLCite
Full Text: DOI

References:

[1] T. Avinadav; T. Chernonog; Y. Perlman, Consignment contract for mobile apps between a single retailer and compertitive developers with different risk attitudes, Eur. J. Oper. Res., 246, 949-957 (2015) · Zbl 1346.90075 · doi:10.1016/j.ejor.2015.05.016
[2] Q. Bai; M. Chen; L. Xu, Revenue and promotional cost-sharing contract versus two-part tariff contract in coordinating sustainable supply chain systems with deteriorating items, Int. J. Prod. Econ., 187, 85-101 (2017) · doi:10.1016/j.ijpe.2017.02.012
[3] E. Bazan; M. Y. Jaber; S. Zanoni, A review of mathematical inventory models for reverse logistics and the future of its modeling: An environmental perspective, Appl. Math. Model., 40, 4151-4178 (2016) · Zbl 1459.90016 · doi:10.1016/j.apm.2015.11.027
[4] P. Beske; A. Land; S. Seuring, Sustainable supply chain management practices and dynamic capabilities in the food industry: A critical analysis of the literature, Int. J. Prod. Econ., 152, 131-143 (2014) · doi:10.1016/j.ijpe.2013.12.026
[5] M. Bonney; M. Y. Jaber, Environmentally responsible inventory models: Non-classical models for a non-classical era, Int. J. Prod. Econ., 133, 43-53 (2011) · doi:10.1016/j.ijpe.2009.10.033
[6] J. Bull, Loads of green washing-can behavioural economics increase willingness-to-pay for efficient washing machines in the UK?, Energ. Policy., 50, 242-252 (2012) · doi:10.1016/j.enpol.2012.07.001
[7] B. Cao; Z. Xiao; X. Li, Joint decision on pricing and waste emission level in industrial symbiosis chain, J. Ind. Manag. Optim., 14, 135-164 (2018) · Zbl 1412.90045 · doi:10.3934/jimo.2017040
[8] X. Chen; G. Hao; L. Li, Channel coordination with a loss-averse retailer and option contracts, Int. J. Prod. Econ., 150, 52-57 (2014) · doi:10.1016/j.ijpe.2013.12.004
[9] C. H. Chiu; T. M. Choi, Supply chain risk analysis with mean-variance models: A technical review, Ann. Oper. Res., 240, 489-507 (2016) · Zbl 1360.90027 · doi:10.1007/s10479-013-1386-4
[10] T. M. Choi; D. Li; H. Yan; C. H. Chiu, Channel coordination in supply chains with agents having mean-variance objectives, Omega, 36, 565-576 (2008) · doi:10.1016/j.omega.2006.12.003
[11] C. Dong; B. Shen; P. S. Chow; L. Yang; C. To Ng, Sustainability investment under cap-and-trade regulation, Ann. Oper. Res., 240, 509-531 (2016) · Zbl 1360.90028 · doi:10.1007/s10479-013-1514-1
[12] S. Du; L. Zhu; L. Liang; F. Ma, Emission-dependent supply chain and environment-policy-making in the ’cap-and-trade’ system, Energ. Policy., 57, 61-67 (2013) · doi:10.1016/j.enpol.2012.09.042
[13] S. Du; L. Hu; L. Wang, Low-carbon supply policies and supply chain performance with carbon concerned demand, Ann. Oper. Res., 255, 569-590 (2017) · Zbl 1400.90189 · doi:10.1007/s10479-015-1988-0
[14] European Commission, Attitudes of Europeans citizens towards the environment, Eurobarometer, 295(2008), Available from: http://www.ec.europa.eu/commfrontoffice/publicopinion/archives/ebs/ebs_295_en.pdf
[15] European Commission, 2013. Available from: http://www.ec.europa.eu/clima/policies/ets/index_en.htm.
[16] X. Gan, S. P. Sethi and H. Yan, Coordination of supply chains with risk-averse agents, Supply Chain Coordination under Uncertainty, (2011), 3-31.
[17] D. He; X. Chen; Q. Huang, Influences of carbon emission abatement on firms’ production policy based on newsboy model, J. Ind. Manag. Optim., 13, 251-265 (2017) · Zbl 1457.90062 · doi:10.3934/jimo.2016015
[18] M. Y. Jaber; C. H. Glock; A. M. A. El Saadany, Supply chain coordination with emissions reduction incentives, Int. J. Prod. Res., 51, 69-82 (2013) · doi:10.1080/00207543.2011.651656
[19] J. Ji; Z. Zhang; L. Yang, Comparisons of initial carbon allowance allocation rules in an O2O retail supply chain with the cap-and-trade regulation, Int. J. Prod. Econ., 187, 68-84 (2017) · doi:10.1016/j.ijpe.2017.02.011
[20] J. Ji; Z. Zhang; L. Yang, Carbon emission reduction decisions in the retail-/dual-channel supply chain with consumers’ preference, J. Clean. Prod., 141, 852-867 (2017) · doi:10.1016/j.jclepro.2016.09.135
[21] J. Li; T. M. Choi; T. C. E. Cheng, Mean variance analysis of fast fashion supply chains with returns policy, IEEE. Trans. Syst. Man. Cybern. Syst., 44, 422-434 (2014) · doi:10.1109/TSMC.2013.2264934
[22] Q. Li; B. Li; P. Chen; P. Hou, Dual-channel supply chain decisions under asymmetric information with a risk-averse retailer, Ann. Oper. Res., 257, 423-447 (2017) · Zbl 1400.90194 · doi:10.1007/s10479-015-1852-2
[23] W. Liu; Y. Wang, Quality control game model in logistics service supply chain based on different combinations of risk attitude, Int. J. Prod. Econ., 161, 181-191 (2015) · doi:10.1016/j.ijpe.2014.12.026
[24] S. Ohmura; H. Matsuo, The effect of risk aversion on distribution channel contracts: Implications for return policies, Int. J. Prod. Econ., 176, 29-40 (2016) · doi:10.1016/j.ijpe.2016.02.019
[25] S. K. Paul; R. Sarker; D. Essam, Managing risk and disruption in production-inventory and supply chain systems: A review, J. Ind. Manag. Optim., 12, 1009-1029 (2016) · Zbl 1331.90006 · doi:10.3934/jimo.2016.12.1009
[26] Q. Qi; J. Wang; Q. Bai, Pricing decision of a two-echelon supply chain with one supplier and two retailers under a carbon cap regulation, J. Clean. Prod., 151, 286-302 (2017) · doi:10.1016/j.jclepro.2017.03.011
[27] Y. Shen; J. Xie; T. Li, The risk-averse newsvendor game with competition on demand, J. Ind. Manag. Optim., 12, 931-947 (2016) · Zbl 1331.90034 · doi:10.3934/jimo.2016.12.931
[28] F. Tao; T. Fan; K. K. Lai, Optimal inventory control policy and supplly chain coordination problem with carbon footprint constraints, Int. T. Oper. Res., 25, 1831-1853 (2018) · Zbl 1407.90332 · doi:10.1111/itor.12271
[29] C. Wang; W. Wang; R. Huang, Supply chain enterprise operations and government carbon tax decisions considering carbon emissions, J. Clean. Prod., 152, 271-280 (2017) · doi:10.1016/j.jclepro.2017.03.051
[30] X. Wang; Y. Lan; W. Tang, An uncertain wage contract model for risk-averse worker under bilateral moral hazard, J. Ind. Manag. Optim., 13, 1815-1840 (2017) · Zbl 1415.91187 · doi:10.3934/jimo.2017020
[31] L. Xia; T. Guo; J. Qin; X. Yue; N. Zhu, Carbon emission redcution and pricing policies of a supply chain considering reciprocal preferences in cap-and-trade system, Ann. Oper. Res., 268, 149-175 (2018) · Zbl 1405.90022 · doi:10.1007/s10479-017-2657-2
[32] T. Xiao; T. M. Choi, Purchasing choices and channel structure strategies for a two-echelon system with risk-averse players, Int. J. Prod. Econ., 120, 54-65 (2009) · doi:10.1016/j.ijpe.2008.07.028
[33] T. Xiao; T. Xu, Pricing and product line strategy in a supply chain with risk-averse players, Int. J. Prod. Econ., 156, 305-315 (2014) · doi:10.1016/j.ijpe.2014.06.021
[34] T. Xiao; D. Yang, Price and service competition of supply chains with riks-averse retailers under demand uncertainty, Int. J. Prod. Econ., 114, 187-200 (2008)
[35] G. Xie; W. Yue; S. Wang, Optimal selection of cleaner productions in a green supply chain with risk aversion, J. Ind. Manag. Optim., 11, 515-528 (2015) · Zbl 1304.90085 · doi:10.3934/jimo.2015.11.515
[36] J. Xu; Y. Chen; Q. Bai, A two-echelon sustainable supply chain coordination under cap-and-trade regulation, J. Clean. Prod., 135, 42-56 (2016) · doi:10.1016/j.jclepro.2016.06.047
[37] X. Xu; P. He; H. Xu; Q. Zhang, Supply chain coordiantion with green technology under cap-and-trade regulation, Int. J. Prod. Econ., 183, 433-442 (2017)
[38] X. Xu; W. Zhang; P. He; X. Xu, Production and pricing problems in make-to-order supply chain with cap-and-trade regulation, Omega, 66, 248-257 (2017) · doi:10.1016/j.omega.2015.08.006
[39] W. Xue; T. M. Choi; L. Ma, Diversification strategy with random yield suppliers for a mean-variance risk-sensitive manufacturer, Transpor. Res. E-Log., 90, 90-107 (2016) · doi:10.1016/j.tre.2016.01.013
[40] H. Yang; W. Chen, Retailer-driven carbon emission abatement with consumer environmental awareness and carbon tax: Revenue-sharing versus Cost-sharing, Omega, 78, 179-191 (2018) · doi:10.1016/j.omega.2017.06.012
[41] L. Yang; Q. Zhang; J. Ji, Pricing and carbon emission recuction decisions in supply chains with vertical and horizontal cooperation, Int. J. Prod. Econ., 191, 286-297 (2017)
[42] L. Zhang; J. Wang; J. You, Consumer environmetal awareness and channel coordination with two substitutable products, Eur. J. Oper. Res., 241, 63-73 (2015) · Zbl 1338.90071 · doi:10.1016/j.ejor.2014.07.043
[43] J. Zhao; J. Wei; Y. Li, Pricing and remanufacturing decisions for two substitutable products with a common retailer, J. Ind. Manag. Optim., 13, 1125-1147 (2017) · Zbl 1364.90055 · doi:10.3934/jimo.2016065
[44] Y. Zhao; T. M. Choi; T. C. E. Cheng; S. Wang, Mean-risk analysis of wholesale price contracts with stochastic price-dependent demand, Ann. Oper. Res., 257, 491-518 (2017) · Zbl 1401.90044 · doi:10.1007/s10479-014-1689-0
[45] Y. Zhou; Z. Shen; R. Ying; X. Xu, A loss-averse two-product odering model with information updating in two-echelon inventory system, J. Ind. Manag. Optim., 14, 687-705 (2018) · Zbl 1412.90048 · doi:10.3934/jimo.2017069
[46] Y. Zu; L. Chen; Y. Fan, Research on low-carbon strategies in supply chain with environmental regulations based on differential game, J. Clean. Prod., 177, 527-546 (2018) · doi:10.1016/j.jclepro.2017.12.220
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. In some cases that data have been complemented/enhanced by data from zbMATH Open. This attempts to reflect the references listed in the original paper as accurately as possible without claiming completeness or a perfect matching.