Impact of revenue-sharing contracts on green supply chain in manufacturing industry. Issue 4 (3rd July 2020)

• Record Type: Journal Article
• Authors: Rong, Luqing; Xu, Maozeng
• Is Part Of: International journal of sustainable engineering. Volume 13:Issue 4(2020)
• Page Start: 316
• Page End: 326
• Publication Date: 2020-07-03
• Subjects: Manufacturing Industry -- Green Supply Chain -- Stability -- Green Supply Chain Coordination -- Nash Bargaining; Sustainable engineering -- Periodicals; Environmental engineering -- Periodicals; 620
• DOI: 10.1080/19397038.2019.1709105
• Languages: English
• ISSNs: 1939-7038

Abstract

ABSTRACT: This paper discusses the coordination of green level improvement in a manufacturing supply chain, and analyses the impact of a retailer' s undertaking a manufacturer's green R&D costs on stability of the green supply chain. Our research motivation sources from manufacturing enterprises in supply chains, which have been increasingly required to reduce carbon footprint and produce green products. With the help of game theory, we first present green supply chain models without revenue-sharing contracts (RSCs) in centralised and decentralised scenarios. Then, pure RSC and revenue sharing through bargaining contract (RSB) are discussed in decentralised scenarios, the retailer decides the revenue-sharing rate to the manufacturer in RS, and in RSB the retailer and the manufacturer jointly determine the ratio by negotiation. It is found that both contracts can improve the green level of the supply chain, especially RSB. However, RSB makes the green supply chain uncoordinated because it harms the retailer's benefits. Therefore, this paper contributes to efforts of proposing two kinds of improved RSB, which can promote not only the continual cooperation of supply chain members, but also the goal of improving the green level. Finally, we exert numerical examples under different RSCs to verify the results.