IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v195y2018icp328-337.html
   My bibliography  Save this article

Make or buy? It is the question: A study in the presence of carbon tax

Author

Listed:
  • Meng, Xiaoge
  • Yao, Zhong
  • Nie, Jiajia
  • Zhao, Yingxue

Abstract

In this paper, we explore make-or-buy decision of a manufacturer, taking the effect of carbon tax (CT) into account. We characterize the optimal strategies including the production quantity, wholesale price, and CT rate with the CT rate considered exogenous or endogenous, respectively. We also examine the optimal make-or-buy strategies for the manufacturer under different levels of CT rate. In addition, We conduct an analysis for the government regarding when it should or should not regulate the CT rate. With the studies, some significant managerial findings are obtained for the make-or-buy decision making in the presence of CT. In particular, it is found that in addition to CT rate level, the ratio between marginal environmental cost and marginal gross profit of the product (without excluding CT) can essentially affect whether or not the government should regulate the CT rate.

Suggested Citation

  • Meng, Xiaoge & Yao, Zhong & Nie, Jiajia & Zhao, Yingxue, 2018. "Make or buy? It is the question: A study in the presence of carbon tax," International Journal of Production Economics, Elsevier, vol. 195(C), pages 328-337.
    • Handle: RePEc:eee:proeco:v:195:y:2018:i:c:p:328-337
    DOI: 10.1016/j.ijpe.2017.10.029
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527317303444
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2017.10.029?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhang, Ling & Zhang, Zheng, 2022. "Dynamic analysis of the decision of authorized remanufacturing supply chain affected by government subsidies under cap-and-trade policies," Chaos, Solitons & Fractals, Elsevier, vol. 160(C).
    2. Tang, Xiaoying & He, Yong & Salling, Melissza, 2021. "Optimal pricing and production strategies for two manufacturers with industrial symbiosis," International Journal of Production Economics, Elsevier, vol. 235(C).
    3. Yang, Yuxiang & Goodarzi, Shadi & Jabbarzadeh, Armin & Fahimnia, Behnam, 2022. "In-house production and outsourcing under different emissions reduction regulations: An equilibrium decision model for global supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 157(C).
    4. Jingpei Ma & Xuejun Sun, 2023. "Green technology licensing: Evaluating government subsidies based on different efficiency levels across competitors," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 1920-1934, June.
    5. He, Peng & He, Yong & Xu, Henry, 2019. "Channel structure and pricing in a dual-channel closed-loop supply chain with government subsidy," International Journal of Production Economics, Elsevier, vol. 213(C), pages 108-123.
    6. Zhou, Xiaoyang & Wei, Xiaoya & Lin, Jun & Tian, Xin & Lev, Benjamin & Wang, Shouyang, 2021. "Supply chain management under carbon taxes: A review and bibliometric analysis," Omega, Elsevier, vol. 98(C).
    7. Dingzhong Feng & Lei Ma & Yangke Ding & Guanghua Wu & Ye Zhang, 2019. "Decisions of the Dual-Channel Supply Chain under Double Policy Considering Remanufacturing," IJERPH, MDPI, vol. 16(3), pages 1-20, February.
    8. Wenxue Ran & Teng Xu, 2023. "Low-Carbon Supply Chain Coordination Based on Carbon Tax and Government Subsidy Policy," Sustainability, MDPI, vol. 15(2), pages 1-19, January.
    9. Bai, Qingguo & Xu, Jianteng & Gong, Yeming & Chauhan, Satyaveer S., 2022. "Robust decisions for regulated sustainable manufacturing with partial demand information: Mandatory emission capacity versus emission tax," European Journal of Operational Research, Elsevier, vol. 298(3), pages 874-893.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:195:y:2018:i:c:p:328-337. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.