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

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  • Choi, Tsan-Ming

Abstract

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.

Suggested Citation

  • Choi, Tsan-Ming, 2013. "Local sourcing and fashion quick response system: The impacts of carbon footprint tax," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 55(C), pages 43-54.
  • Handle: RePEc:eee:transe:v:55:y:2013:i:c:p:43-54
    DOI: 10.1016/j.tre.2013.03.006
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    References listed on IDEAS

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    2. Gao Xiang Lou & Hai Yang Xia & Jie Qiong Zhang & Ti Jun Fan, 2015. "Investment Strategy of Emission-Reduction Technology in a Supply Chain," Sustainability, MDPI, Open Access Journal, vol. 7(8), pages 1-25, August.
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    4. Sheu, Jiuh-Biing, 2014. "Airline ambidextrous competition under an emissions trading scheme – A reference-dependent behavioral perspective," Transportation Research Part B: Methodological, Elsevier, vol. 60(C), pages 115-145.
    5. Bin Shen, 2014. "Sustainable Fashion Supply Chain: Lessons from H&M," Sustainability, MDPI, Open Access Journal, vol. 6(9), pages 1-14, September.
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    10. Jian Li & Weihao Du & Fengmei Yang & Guowei Hua, 2014. "Evolutionary Game Analysis of Remanufacturing Closed-Loop Supply Chain with Asymmetric Information," Sustainability, MDPI, Open Access Journal, vol. 6(9), pages 1-13, September.
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    13. Yang, Daojian & Qi, Ershi & Li, Yajiao, 2015. "Quick response and supply chain structure with strategic consumers," Omega, Elsevier, vol. 52(C), pages 1-14.
    14. Palak, Gökçe & Ekşioğlu, Sandra Duni & Geunes, Joseph, 2014. "Analyzing the impacts of carbon regulatory mechanisms on supplier and mode selection decisions: An application to a biofuel supply chain," International Journal of Production Economics, Elsevier, vol. 154(C), pages 198-216.
    15. Choi, Tsan-Ming, 2015. "Sustainable management of mining operations with accidents: A mean-variance optimization model," Resources Policy, Elsevier, vol. 46(P1), pages 116-122.
    16. Alexandra-Codru?a POPESCU (BÎZOI), 2015. "On The Sustainability Of Fast Fashion Supply Chains – A Comparison Between The Sustainability Of Inditex And H&M’S Supply Chains," Management and Marketing Journal, University of Craiova, Faculty of Economics and Business Administration, vol. 0(2), pages 333-352, November.
    17. Ivanov, Dmitry & Pavlov, Alexander & Dolgui, Alexandre & Pavlov, Dmitry & Sokolov, Boris, 2016. "Disruption-driven supply chain (re)-planning and performance impact assessment with consideration of pro-active and recovery policies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 90(C), pages 7-24.
    18. Schaefer, Brian & Konur, Dinçer, 2015. "Economic and environmental considerations in a continuous review inventory control system with integrated transportation decisions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 80(C), pages 142-165.
    19. Serel, Doğan A., 2015. "Production and pricing policies in dual sourcing supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 76(C), pages 1-12.
    20. Arıkan, Emel & Jammernegg, Werner, 2014. "The single period inventory model under dual sourcing and product carbon footprint constraint," International Journal of Production Economics, Elsevier, vol. 157(C), pages 15-23.
    21. Tsan-Ming Choi & Yongjian Li, 2015. "Sustainability in Fashion Business Operations," Sustainability, MDPI, Open Access Journal, vol. 7(11), pages 1-7, November.
    22. repec:eee:jomega:v:71:y:2017:i:c:p:46-65 is not listed on IDEAS
    23. Wang, Mingzheng & Liu, Junling & Chan, Hau-Ling & Choi, Tsan-Ming & Yue, Xiaohang, 2016. "Effects of carbon tariffs trading policy on duopoly market entry decisions and price competition: Insights from textile firms of developing countries," International Journal of Production Economics, Elsevier, vol. 181(PB), pages 470-484.
    24. Cui, Qinquan & Chiu, Chun-Hung & Dai, Xin & Li, Zhongfei, 2016. "Store brand introduction in a two-echelon logistics system with a risk-averse retailer," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 90(C), pages 69-89.

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