Please use this identifier to cite or link to this item: http://hdl.handle.net/1893/31147
Appears in Collections:Computing Science and Mathematics Journal Articles
Peer Review Status: Refereed
Title: Production and joint emission reduction decisions based on two-way cost-sharing contract under cap-and-trade regulation
Author(s): Wang, Zhongrui
Brownlee, Alexander
Wu, Qinghua
Contact Email: alexander.brownlee@stir.ac.uk
Keywords: Cap-and-trade
Carbon emission reduction
Low-carbon supply chain
Cost-sharing contract
Issue Date: Aug-2020
Citation: Wang Z, Brownlee A & Wu Q (2020) Production and joint emission reduction decisions based on two-way cost-sharing contract under cap-and-trade regulation. Computers and Industrial Engineering, 146, Art. No.: 106549. https://doi.org/10.1016/j.cie.2020.106549
Abstract: Cap-and-trade regulation is widely applied as a carbon policy in low-carbon supply chain management. This study investigates production and carbon emission reduction strategies that are based on such regulation in a two-echelon supply chain, which comprises one manufacturer and one retailer. In this supply chain, the manufacturer directly participates in carbon emission reduction while the retailer is indirectly involved in low-carbon promotion. On this basis, we establish single and joint emission reduction models, in which supply chain members may adopt the one-way or two-way cost-sharing contracts. We then analyze the optimal strategy design for supply chain and the appropriate sharing rate contract. We find that the implementation of contracts can increase carbon emission abatement level, product quantity and supply chain profit. The one-way cost-sharing contract is beneficial for supply chain, whereas the two-way cost-sharing contract is also beneficial for supply chain when the sharing rate is in a small range. Under certain conditions, joint emission reduction model is optimal choice for supply chain. Meanwhile, the sharing rate can affect supply chain choice between decentralized and centralized decisions. Then we propose the extended multiple retailers model and find that this model offers better performance. In addition, carbon emission abatement level increases with carbon trading price by numerical study. The government can stimulate supply chain to reduce carbon emission by regulating carbon trading price, and should also pay attention to the impact on supply chain production and profits.
DOI Link: 10.1016/j.cie.2020.106549
Rights: This item has been embargoed for a period. During the embargo please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author. You can only request a copy if you wish to use this work for your own research or private study. Accepted refereed manuscript of: Wang Z, Brownlee A & Wu Q (2020) Production and joint emission reduction decisions based on two-way cost-sharing contract under cap-and-trade regulation. Computers and Industrial Engineering, 146, Art. No.: 106549. https://doi.org/10.1016/j.cie.2020.106549 © 2020, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/
Licence URL(s): http://creativecommons.org/licenses/by-nc-nd/4.0/

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