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Coordinating a Two-Echelon Supply Chain under Carbon Tax

Author

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  • Wei Yu

    (School of Economics and Management, Southeast University, Nanjing 210018, China)

  • Ruizhu Han

    (School of Economics and Management, Southeast University, Nanjing 210018, China)

Abstract

In this paper, we study the impact of carbon tax on carbon emission and retail price in a two-echelon supply chain consisting of a manufacturer and a retailer. Specifically, by adopting two types of contracts, i.e., the modified wholesale price (MW) and the modified cost-sharing contract (MS), supply chain coordination is achieved, which promotes the supply chain efficiency. Our study shows that: (1) with the increase of carbon tax, both the optimal emission reduction level and the optimal retail price increase, and then keep unchanged; (2) neither MW nor MS benefits the manufacturer after the supply chain coordination; and (3) to effectively coordinate the supply chain, we propose an innovative supply chain contract that integrates the firms’ optimal decisions under MW or MS with a two part tariff contract (TPT) and a fixed fee the retailer can pay to ensure a win–win solution.

Suggested Citation

  • Wei Yu & Ruizhu Han, 2017. "Coordinating a Two-Echelon Supply Chain under Carbon Tax," Sustainability, MDPI, vol. 9(12), pages 1-13, December.
    • Handle: RePEc:gam:jsusta:v:9:y:2017:i:12:p:2360-:d:123337
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    References listed on IDEAS

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    Cited by:

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