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Supply chain analysis under green sensitive consumer demand and cost sharing contract

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  • Ghosh, Debabrata
  • Shah, Janat

Abstract

In this paper, we explore supply chain coordination issues arising out of green supply chain initiatives and explore the impact of cost sharing contract on the key decisions of supply chain players undertaking green initiatives. Our motivation comes from firms conducting pioneering work in the area of carbon footprint reduction in their supply chains through product redesign. Through a game theoretic approach we show how product greening levels, prices and profits are influenced by cost sharing contract within the supply chains. We study two models of cost sharing – one in which the retailer offers a cost sharing contract and the other in which the retailer and manufacturer bargain on the cost sharing contract. We also study the impact of greening costs and consumer sensitivity towards green products. Our key contribution lies in modelling cost sharing contract and analysing its impact on a green supply chain. Our study contributes to the burgeoning field of green supply chains and collaboration between channel partners.

Suggested Citation

  • Ghosh, Debabrata & Shah, Janat, 2015. "Supply chain analysis under green sensitive consumer demand and cost sharing contract," International Journal of Production Economics, Elsevier, vol. 164(C), pages 319-329.
  • Handle: RePEc:eee:proeco:v:164:y:2015:i:c:p:319-329 DOI: 10.1016/j.ijpe.2014.11.005
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    References listed on IDEAS

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    1. repec:ebl:ecbull:eb-17-00155 is not listed on IDEAS
    2. Yenipazarli, Arda, 2017. "To collaborate or not to collaborate: Prompting upstream eco-efficient innovation in a supply chain," European Journal of Operational Research, Elsevier, vol. 260(2), pages 571-587.
    3. Zhu, Wenge & He, Yuanjie, 2017. "Green product design in supply chains under competition," European Journal of Operational Research, Elsevier, vol. 258(1), pages 165-180.
    4. Genc, Talat S. & Giovanni, Pietro De, 2017. "Trade-in and save: A two-period closed-loop supply chain game with price and technology dependent returns," International Journal of Production Economics, Elsevier, vol. 183(PB), pages 514-527.
    5. Dongxue Guo & Yi He & Yuanyuan Wu & Qingyun Xu, 2016. "Analysis of Supply Chain under Different Subsidy Policies of the Government," Sustainability, MDPI, Open Access Journal, vol. 8(12), pages 1-18, December.
    6. repec:eee:proeco:v:193:y:2017:i:c:p:691-702 is not listed on IDEAS

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