Carbon Reduction in A two-echelon supply chain by considering quality level, return policy and refund pricing: game theory approach

Document Type : Research Paper

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Abstract

In today's competitive market, according to the importance of environmental issues, customers prefer to buy products with low carbon emission. Furthermore the quality level of products and return policy as an after-sales services has an effect on market’demand. In this article, a two echelon supply chain with one manufacture and one retailer by considering the effect of decision variables, including carbon emission reducing rate, residual inventory level of retailer, refund price and quality level on market’demand and profit of supply chain and its members in two centralized systems and decentralized form by using Nash equilibrium and ُStackelberg game is studied. We find out in a centralized form, the profit of the supply chain and decision variables are more than decentralized form. And in decentralized form in Nash equilibrium supply chain profit is more than retailer dominant case in ُُStackelberg game. Note importance of quality level in the retailer dominant cause is not cause of supply chain profit improvement and its members. And in Nash equilibrium, it does not show manufacture profit improvement as a result. But it leads to retailer and supply chain profits improvement.

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References

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Journal of Industrial Engineering Research in Production Systems
Volume 5, Issue 11
March 2018
Pages 229-249

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