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Pricing and equity in cross-regional green supply chains

Author

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  • Chen, Daqiang
  • Ignatius, Joshua
  • Sun, Danzhi
  • Goh, Mark
  • Zhan, Shalei

Abstract

This paper addresses the problem of the firms operating on cross-border or inter-regional platforms that are subject to the enforcement of each local government's carbon emissions regulatory policy, thus causing an imbalance in the sharing of the burden of the greening of the total supply chain. We introduce the concept of equity as the incentive mechanism to coordinate this green supply chain which is a function of the carbon emission permits and the revenue generated by the firms. Due to the complexity and imbalance in the original incentive mechanism to this problem, we provide a new equivalent supply chain network equilibrium model under elastic demand based on user equilibrium theory. We state the user equilibrium conditions and provide the equivalent formulation. We show the trade-offs under various carbon emissions regulatory policies. A product with higher price elasticity and carbon emission intensity not only hampers the firm from gaining a higher revenue, but it also reduces the equity of the system under an invariant emission regulatory policy.

Suggested Citation

  • Chen, Daqiang & Ignatius, Joshua & Sun, Danzhi & Goh, Mark & Zhan, Shalei, 2020. "Pricing and equity in cross-regional green supply chains," European Journal of Operational Research, Elsevier, vol. 280(3), pages 970-987.
    • Handle: RePEc:eee:ejores:v:280:y:2020:i:3:p:970-987
    DOI: 10.1016/j.ejor.2019.07.059
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    Citations

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    Cited by:

    1. Cai, Jianhu & Sun, Haining & Shang, Jennifer & Hegde, Gajanan G., 2023. "Information structure selection in a green supply chain: Impacts of wholesale price and greenness level," European Journal of Operational Research, Elsevier, vol. 306(1), pages 34-46.
    2. Bing-Bing Cao & Mei-Fei Zhu & Quan Tian, 2022. "Optimal Operation Policies in a Cross-Regional Fresh Product Supply Chain with Regional Government Subsidy Heterogeneity to Blockchain-Driven Traceability," Mathematics, MDPI, vol. 10(23), pages 1-40, December.
    3. Xi Yang & Maozeng Xu & Wanleng Zhang, 2020. "Can Design for the Environment be Worthwhile? Green Design for Manufacturers Brands When Confronted with Competition from Store Brands," Sustainability, MDPI, vol. 12(3), pages 1-18, February.
    4. Shaobo Wu & Shiping Wen & Quan Zhou & Xinghong Qin, 2020. "Coordination of Store Brand Product’s Green Supply Chain Based on Negotiation," Sustainability, MDPI, vol. 12(9), pages 1-25, May.
    5. Simeng Wang & Yongsheng Cheng & Xiaoxian Zhang & Chenchen Zhu, 2020. "The Implications of Vertical Strategic Interaction on Green Technology Investment in a Supply Chain," Sustainability, MDPI, vol. 12(18), pages 1-14, September.
    6. Kumar, Anil & Luthra, Sunil & Mangla, Sachin Kumar & Garza-Reyes, Jose Arturo & Kazancoglu, Yigit, 2023. "Analysing the adoption barriers of low-carbon operations: A step forward for achieving net-zero emissions," Resources Policy, Elsevier, vol. 80(C).
    7. Hu, Xiaowei & Li, Peng, 2022. "Relief and stimulus in a cross-sector multi-product scarce resource supply chain network," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 168(C).
    8. Syed Asif Raza, 2022. "A bibliometric analysis of pricing models in supply chain," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(2), pages 228-251, April.

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