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An Incentive Mechanism Design in a Closed-Loop Power Supply Chain Regarding Fairness Concerns

Author

Listed:
  • Ding Li

    (State Grid Commercial Big Data Co., Ltd.)

  • Tao Fang

    (State Grid Commercial Big Data Co., Ltd.)

  • Jiasheng Wu

    (State Grid Commercial Big Data Co., Ltd.)

  • Qinglong Meng

    (State Grid Commercial Big Data Co., Ltd.)

  • Liang Wang

    (State Grid Commercial Big Data Co., Ltd.)

Abstract

This article considers a closed-loop power supply chain which comprises one manufacturer and one retailer for trading a single electricity product. The market demand of the electricity product is linearly dependent on selling price and retail sale carbon effort, and the amount of recycling of waste electricity products is linearly dependent on recycling price and retail carbon effort. We find that if the producer is equity sensitive, it harms the profitability of the electricity supply chain and the profitability of the members of the electricity supply chain. Meanwhile, if retailers are equity-sensitive, they engage in high levels of carbon effort but lead producers to set low-carbon prices, among other things. To examine the effects of key model-parameters on the decisions, we perform a sensitivity analysis for a numerical example.

Suggested Citation

  • Ding Li & Tao Fang & Jiasheng Wu & Qinglong Meng & Liang Wang, 2025. "An Incentive Mechanism Design in a Closed-Loop Power Supply Chain Regarding Fairness Concerns," Lecture Notes in Operations Research,, Springer.
    • Handle: RePEc:spr:lnopch:978-981-96-9697-0_89
    DOI: 10.1007/978-981-96-9697-0_89
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