Cost-Sharing Contract in Low Carbonization Supply Chain Based on Improving Demand for Low-Carbon Products

Abstract:

For the existence of carbon emission reduction cost, the retail price of the products is so high that the market demand is low, which restricts the promotion of low-carbon products. On the background of a bilateral-monopoly supply chain consisting of a single manufacturer and a single retailer, we establish Stackelberg models based on the carbon emission reduction cost-sharing. And we analyze the changes of the order quantity, the profits of each member and the whole supply chain before and after the implementation of the carbon emission reduction cost-sharing contract. According to the research, when the carbon emission reduction cost-sharing contract is introduced into the model, it leads to a good consequence that the optimal order quantity of the low-carbon product increases, the retail price decreases, and the manufacturer and the retailer will get Pareto improvement on certain condition. Then we derivate the necessary conditions that the profit of the retailer and the manufacturer could both increase.

• Periodical: Advanced Materials Research (Volumes 1073-1076)
• Pages: 2539-2544
• DOI: https://doi.org/10.4028/www.scientific.net/AMR.1073-1076.2539
• Online since: December 2014
• Authors: Yan Ju Zhou, Yu Qing Huang*
• Keywords: Carbon Emission Reduction Cost, Cost-Sharing Contract, Low-Carbon Cognition, Optimal Order Quantity, Supply Chain

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