Coordination of a green supply chain with one manufacturer and two duopolistic retailers through an environmental and social cost sharing contract

Document Type: Research Paper

Authors

School of Industrial Engineering, Iran University of Science and Technology, Tehran, Iran

Abstract

In this paper, an incentive contract is proposed to coordinate the environmental and social decisions in a manufacturer-duopolistic retailers green supply chain.The manufacturer invests in newtechnology to enhance the green level of the products and two retailers invest in the corporate social responsibility (CSR). The investigated supply chain is modeled under three decision-making structures. In the decentralized model, a manufacturer-Stackelberg game under the two different game behaviors of retailers (Cournot and Collusion) is investigated. Afterward, the centralized model as a benchmark is established. Then, an environmental and social cost sharing contract is developed to encourage the supply chain members to participate in the coordination model. Under the coordination model, the surplus profit is shared among the members based on the members’ bargaining power. Results demonstrate that the proposed coordination contract not only improves the profitability of entire supply chain and members,but also enhances the green quality and CSR investment compared with the decentralized model. Therefore, theproposed coordination model is of high importance from environmental consideration.

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Main Subjects


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