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Environmental-regulation pricing strategies for green supply chain management

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  • Chen, Yenming J.
  • Sheu, Jiuh-Biing

Abstract

This paper demonstrates that a proper design of environmental-regulation pricing strategies is able to promote Extended Product Responsibility for green supply chain firms in a competitive market. A differential game model comprising Vidale-Wolfe equation has been established in light of sales competition and recycling dynamics as well as regulation related profit function. Analytic solutions of Markovian Nash equilibriums are provided with the necessary condition derived from Hamilton-Jacobi-Bellman equations. We found that governments should opt to gradually raise regulation standards so that rational manufacturers will gradually improve its product recyclability, and, in turn, Extended Product Responsibility will get promoted.

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Bibliographic Info

Article provided by Elsevier in its journal Transportation Research Part E: Logistics and Transportation Review.

Volume (Year): 45 (2009)
Issue (Month): 5 (September)
Pages: 667-677

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Handle: RePEc:eee:transe:v:45:y:2009:i:5:p:667-677

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Keywords: Extended Production Responsibility Differential game Optimal control;

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References

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  1. Mukhopadhyay, Samar K. & Setaputra, Robert, 2007. "A dynamic model for optimal design quality and return policies," European Journal of Operational Research, Elsevier, vol. 180(3), pages 1144-1154, August.
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  6. Palmer, Karen & Walls, Margaret, 1997. "Optimal policies for solid waste disposal Taxes, subsidies, and standards," Journal of Public Economics, Elsevier, vol. 65(2), pages 193-205, August.
  7. Don Fullerton & Wenbo Wu, 1996. "Policies for Green Design," NBER Working Papers 5594, National Bureau of Economic Research, Inc.
  8. Walls, Margaret, 2003. "The Role of Economics in Extended Producer Responsibility: Making Policy Choices and Setting Policy Goals," Discussion Papers dp-03-11, Resources For the Future.
  9. Vogelsang, Ingo, 2002. "Incentive Regulation and Competition in Public Utility Markets: A 20-Year Perspective," Journal of Regulatory Economics, Springer, vol. 22(1), pages 5-27, July.
  10. Ekins, Paul, 1999. "European environmental taxes and charges: recent experience, issues and trends," Ecological Economics, Elsevier, vol. 31(1), pages 39-62, October.
  11. Kriwet, A. & Zussman, E. & Seliger, G., 1995. "Systematic integration of design-for-recycling into product design," International Journal of Production Economics, Elsevier, vol. 38(1), pages 15-22, March.
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  13. Chongwoo Choe & Iain Fraser, 2001. "On the Flexibility of Optimal Policies for Green Design," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 18(4), pages 367-371, April.
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Citations

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Cited by:
  1. Nazzal, Dima & Batarseh, Ola & Patzner, Joshua & Martin, Darren R., 2013. "Product servicing for lifespan extension and sustainable consumption: An optimization approach," International Journal of Production Economics, Elsevier, vol. 142(1), pages 105-114.
  2. Chen, Yenming J. & Sheu, Jiuh-Biing & Lirn, Taih-Cherng, 2012. "Fault tolerance modeling for an e-waste recycling supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(5), pages 897-906.
  3. Gunasekaran, Angappa & Spalanzani, Alain, 2012. "Sustainability of manufacturing and services: Investigations for research and applications," International Journal of Production Economics, Elsevier, vol. 140(1), pages 35-47.
  4. Gavronski, Iuri & Klassen, Robert D. & Vachon, Stephan & Nascimento, Luis Felipe Machado do, 2011. "A resource-based view of green supply management," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(6), pages 872-885.
  5. Hassini, Elkafi & Surti, Chirag & Searcy, Cory, 2012. "A literature review and a case study of sustainable supply chains with a focus on metrics," International Journal of Production Economics, Elsevier, vol. 140(1), pages 69-82.
  6. Hong, I-Hsuan & Yeh, Jun-Sheng, 2012. "Modeling closed-loop supply chains in the electronics industry: A retailer collection application," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(4), pages 817-829.
  7. Azevedo, Susana G. & Carvalho, Helena & Cruz Machado, V., 2011. "The influence of green practices on supply chain performance: A case study approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(6), pages 850-871.
  8. Rika Ampuh Hadiguna, 2012. "Decision support framework for risk assessment of sustainable supply chain," International Journal of Logistics Economics and Globalisation, Inderscience Enterprises Ltd, vol. 4(1/2), pages 35-54.
  9. Cheng, Jao-Hong, 2011. "Inter-organizational relationships and knowledge sharing in green supply chains—Moderating by relational benefits and guanxi," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(6), pages 837-849.
  10. Chen, Yenming & Wu, Tien-Hua, 2010. "The diffusion dynamics of the informal sector and sustainable WEEE supply chain," MPRA Paper 25650, University Library of Munich, Germany.
  11. Sheu, Jiuh-Biing & Gao, Xiao-Qin, 2014. "Alliance or no alliance—Bargaining power in competing reverse supply chains," European Journal of Operational Research, Elsevier, vol. 233(2), pages 313-325.
  12. Chen, Yenming & Wu, Tien-Hua, 2010. "Effective e-waste management-The role of international cooperation and fragementation," MPRA Paper 25902, University Library of Munich, Germany.

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