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Impacts of Power Structure on Sustainable Supply Chain Management

Author

Listed:
  • Zhi Li

    (Business School, Sichuan University, Chengdu 610065, China)

  • Yangyang Xu

    (Business School, Sichuan University, Chengdu 610065, China)

  • Fumin Deng

    (Business School, Sichuan University, Chengdu 610065, China)

  • Xuedong Liang

    (Business School, Sichuan University, Chengdu 610065, China)

Abstract

The present paper examines the manufacturer’s operational decisions, e.g., wholesale price and product sustainability level, the retailer’s operational decision, e.g., retail margin, and supply chain efficiency under three supply chain power structures: manufacturer Stackelberg, Nash and retailer Stackelberg. As a benchmark, we first obtain the equlibrium price and product sustainability level in a vertically integrated supply chain. Our analysis provides some interesting findings in a decentralized supply chain: (i) a dominant manufacturer (retailer) always benefits from its power; (ii) the entire supply chain earns the most profit from the Nash game, and the least from the retailer Stackelberg game, respectively; (iii) as the power shifts from the manufacturer to the retailer, product sustainability and retail price increase; (iv) dominant manufacturer does not necessarily imply low wholesale price that would benefit the retailer. Managerial insights are provided for the manufacturer and the retailer, respectively.

Suggested Citation

  • Zhi Li & Yangyang Xu & Fumin Deng & Xuedong Liang, 2017. "Impacts of Power Structure on Sustainable Supply Chain Management," Sustainability, MDPI, vol. 10(1), pages 1-10, December.
    • Handle: RePEc:gam:jsusta:v:10:y:2017:i:1:p:55-:d:124501
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    References listed on IDEAS

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