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Local sourcing and fashion quick response system: The impacts of carbon footprint tax

Listed author(s):
  • Choi, Tsan-Ming
Registered author(s):

    Quick response (QR) system is a well-established industrial practice in fashion apparel. It aims at enhancing inventory management by reducing lead time. In addition to employing a faster delivery mode, QR can be achieved by local sourcing (instead of offshore sourcing). This paper analytically studies how a properly designed carbon footprint taxation scheme can be imposed on a QR system to enhance environmental sustainability via employing a local manufacturer by offsetting the probable higher total logistics and production costs. By examining both the single-ordering and the dual-ordering QR systems, we illustrate how the carbon footprint taxation scheme affects the optimal choice of sourcing decision. Our analytical findings reveal that a properly designed carbon footprint taxation scheme by governing body not only can successfully entice the fashion retailer to source from a local manufacturer, but it can also lead to a lower level of risk for the fashion retailer. A mean-risk improving scenario hence results and it provides a significant incentive to convince the fashion retailer to support the idea of joining QR when the carbon footprint tax is in place.

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    File URL: http://www.sciencedirect.com/science/article/pii/S1366554513000562
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    Article provided by Elsevier in its journal Transportation Research Part E: Logistics and Transportation Review.

    Volume (Year): 55 (2013)
    Issue (Month): C ()
    Pages: 43-54

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    Handle: RePEc:eee:transe:v:55:y:2013:i:c:p:43-54
    DOI: 10.1016/j.tre.2013.03.006
    Contact details of provider: Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description

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