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Supply Chain Coordination under Carbon Emission Tax Regulation Considering Greening Technology Investment

Author

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  • Zhimin Wei

    (School of Business, Macau University of Science and Technology, Macao, China
    School of Economics and Trade, Guangxi Vocational Normal University, Nanning 530007, China)

  • Yun Huang

    (School of Business, Macau University of Science and Technology, Macao, China)

Abstract

In this paper, we firstly derive the optimal strategies, including greening technology investment, production volume and order quantity decisions with stochastic demand, for the emissions-dependent supply chain composed of one manufacturer and one retailer. Then, an advance purchase discount (APD) contract and an option contract are applied to coordinate the supply chain. Moreover, an innovative prepayment-based option (PBO) contract is designed based on an APD contract and an option contract. We discuss the cash flow, the inventory risk allocation and the impacts of carbon emission tax under each contract. It is found that considering improving cash flow, preselling (or option selling) as a means of supporting the manufacturer with sufficient cash flow will help expand production and invest in greening technology. From the perspective of avoiding inventory risk, the APD contract benefits the manufacturer while the option contract benefits the retailer. However, the PBO contract generates intermediate allocations of inventory risk between manufacturer and retailer.

Suggested Citation

  • Zhimin Wei & Yun Huang, 2022. "Supply Chain Coordination under Carbon Emission Tax Regulation Considering Greening Technology Investment," IJERPH, MDPI, vol. 19(15), pages 1-27, July.
    • Handle: RePEc:gam:jijerp:v:19:y:2022:i:15:p:9232-:d:874736
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    References listed on IDEAS

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    Cited by:

    1. Sina Abbasi & Babek Erdebilli, 2023. "Green Closed-Loop Supply Chain Networks’ Response to Various Carbon Policies during COVID-19," Sustainability, MDPI, vol. 15(4), pages 1-30, February.
    2. Manyi Tan & Fei Pei & Li He & Hong Cheng & Shupeng Huang, 2023. "Optimal Decision-Making of Closed-Loop Supply Chains in E-Commerce Platform Considering Sales Cooperations under Environmental Effects and WEEE Regulations," IJERPH, MDPI, vol. 20(9), pages 1-28, May.
    3. Fei Wang & Dalin Zhang, 2022. "Effects of a Mixed Emissions Control Policy on the Manufacturer’s Production and Carbon Abatement Investment Decisions," IJERPH, MDPI, vol. 19(20), pages 1-20, October.

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