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Cooperation and coordination in green supply chain with R&D uncertainty

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  • Feng Yang
  • Junjun Kong
  • Tianzhuo Liu
  • Sheng Ang

Abstract

Considering the uncertainty of environmental R&D, we investigate a two-echelon supply chain consisting of a manufacturer who invests in green manufacturing to generate a probability of R&D success and a retailer who exerts green marketing to disclose information on the successful R&D outcome to consumers. We explore cooperation issues in green operations by analysing two modes: Decentralized mode where the two firms do not cooperate in green operations, and Cartelization mode where they cooperate as an integrated system to set their individual green decision. We find Cartelization mode increases the profitability for the whole supply chain and the manufacturer but not the retailer. Compared with Decentralized mode, the green supply chain in Cartelization mode cannot be Pareto-improved unless the manufacturer efficiently motivates the retailer to cooperate. Furthermore, we discuss coordination issues under these two modes and find the revenue-sharing contract has more flexibility when coordinating the cartelized supply chain.

Suggested Citation

  • Feng Yang & Junjun Kong & Tianzhuo Liu & Sheng Ang, 2022. "Cooperation and coordination in green supply chain with R&D uncertainty," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 73(3), pages 481-496, March.
    • Handle: RePEc:taf:tjorxx:v:73:y:2022:i:3:p:481-496
    DOI: 10.1080/01605682.2020.1848359
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    Cited by:

    1. Zhou, Chang & Li, Xiang & Chen, Lujie, 2023. "Modelling the effects of metro and bike-sharing cooperation: Cost-sharing mode vs information-sharing mode," International Journal of Production Economics, Elsevier, vol. 261(C).
    2. Hafezi, Maryam & Zhao, Xuan & Zolfagharinia, Hossein, 2023. "Together we stand? Co-opetition for the development of green products," European Journal of Operational Research, Elsevier, vol. 306(3), pages 1417-1438.
    3. Qinghua Feng & Tong Liu, 2022. "Selection Strategy and Coordination of Green Product R&D in Sustainable Competitive Supply Chain," Sustainability, MDPI, vol. 14(14), pages 1-22, July.
    4. Kong, Junjun & Chua, Geoffrey A. & Yang, Feng, 2023. "Firms’ cooperation on recycling investments in a three-echelon reverse supply chain," International Journal of Production Economics, Elsevier, vol. 263(C).
    5. Qing He & Yaqin Liu & Qian Yu & Chao Wei, 2022. "Risk Dominance Analysis of R&D Investment Cooperation in Dynamic Option Game," Sustainability, MDPI, vol. 15(1), pages 1-21, December.
    6. Xing Gao & Ying Wang, 2023. "Competitive analysis of R&D investment with R&D budget constraint and R&D uncertainty," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 2438-2456, June.

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