Pricing decisions for substitutable products with green manufacturing in a competitive supply chain

Ma, Peng, Zhang, Chen, Hong, Xianpei and Xu, Henry (2018) Pricing decisions for substitutable products with green manufacturing in a competitive supply chain. Journal of Cleaner Production, 183 618-640. doi:10.1016/j.jclepro.2018.02.152

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Author Ma, Peng
Zhang, Chen
Hong, Xianpei
Xu, Henry
Title Pricing decisions for substitutable products with green manufacturing in a competitive supply chain
Journal name Journal of Cleaner Production   Check publisher's open access policy
ISSN 0959-6526
Publication date 2018-02-16
Year available 2018
Sub-type Article (original research)
DOI 10.1016/j.jclepro.2018.02.152
Open Access Status File (Author Post-print)
Volume 183
Start page 618
End page 640
Total pages 23
Place of publication Amsterdam, Netherlands
Publisher Elsevier
Language eng
Subject 2105 Renewable Energy, Sustainability and the Environment
2300 Environmental Science
1408 Strategy and Management
2209 Industrial and Manufacturing Engineering
Abstract In this paper, we examine the pricing strategies in a two-stage supply chain with two competitive manufacturers and one retailer. We address six game models: the centralized model (Model I), the MS-Bertrand model (Model II), the MS-Stackelberg model (Model III), the RS-Bertrand model (Model IV), the RS-Stackelberg model (Model V) and the cost-sharing contract model (Model VI) to explore the optimal pricing strategies of substitutable products. We address the optimal green manufacturing level, retail prices, wholesale prices and the profits of supply chain members as well as the whole supply chain under different models. Numerical examples are provided to demonstrate the efficiency and effectiveness of the proposed models. First the impact of green investment on the green manufacturing level and supply chain performance is examined. Then the impact of price elasticity, cross-price sensitivity and green manufacturing coefficient on the green manufacturing level is analyzed. We find that the centralized model is the best, and the cost-sharing contract model will be better than the four decentralized models when the cost-sharing proposition is in a certain interval. Additionally, in decentralized scenarios, the Stackelberg model has an advantage for manufacturers while the Bertrand model is superior for the retailer. Our results also indicate that green manufacturing will benefit the manufacturer involved in green investment.
Keyword Cost-sharing contract
Green investment
Green manufacturing level
Green supply chain
Pricing strategies
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
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UQ Business School Publications
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Created: Thu, 22 Mar 2018, 23:23:55 EST