Intervention of Government in the Competition between Green and Non-Green Supply Chains

Document Type : Research Paper

Authors

1 Associate Prof., Faculty of Industrial Engineering, Alzahra University, Tehran, Iran

2 Ph.D. Student in Industrial Engineering, Faculty of Industrial Engineering, Alzahra University, Tehran, Iran

Abstract

Objective: The environment and the related issues are among the most up-to-date topics and concerns of policymakers, businesses and even ordinary people. Managers often look for environmental issues in the supply chain of their businesses for a variety of reasons, including governmental pressures, peoples’ demands, increasing their market share and etc. In this paper, two types of three-tier green and non-green supply chain including suppliers, manufacturers and retailers are considered with regard to the government intervention in the amount and price of green and non-green products.
Methods: In this research, the role of government as a leader is examined in the form of a nonlinear programming model considering four-level constraints to reduce the economic and environmental costs and increase the social welfare index by setting tariffs for both chains based on Stackelberg game. It is conducted in a fashion that, at first, the tariffs are set by the government (supply chains with green products will receive subsides otherwise they will be fined), and then the price and quantity of the products are determined by the retailer, manufacturer and supplier according to those tariffs.
Results: Finally, numerical examples are presented to illustrate the model and the sensitivity analysis of the importance of the role of the government for each of its goals and its impact on profits and tariffs imposed on supply chain has been examined.
Conclusion: The results showed that the profits of the supply chain members are significantly dependent on tariffs set by the government. The best balance between reducing economic and environmental costs and increasing the welfare of customers is obtained when the government attaches the same importance to all of them; this means that it can meet all three goals alike as much as possible.

Keywords

References

References
Allameh, Gh., Esmaili, M., Tajvidi, T. (2014). The development of several pricing models in the green supply chain under the risk with game theory. Industrial Management Quarterly, 6(4), 767-789. (in Persian)
Azznone, G., & Noci, G. (1996). Measuring the environmental performance of new products: an integrated approach. International Journal of Production Research, 34(11), 3055-3078.
Barari, S., Agarwal, G., Zhang, W.C., Mahanty, B., & Tiwari, M. (2012). A decision framework for the analysis of green supply chain contracts: An evolutionary game approach. Journal of expert systems with applications, 39(3), 2965-2976.
Bischi, G.I., Chiarella, C., Kopel, M., Szidarovszky, F. (2009). Nonlinear Oligopolies: Stability and Bifurcations. Business and Economics, Springer.
Boonman, H.J., Hagspiel, V., Kort, P.M. (2015). Dedicated vs product flexible production technology: strategic capacity investment choice. Journal of operation and research, 244(1), 141-152.
Chen, X., & Hao, G. (2015). Sustainable pricing and production policies for two competing firms with carbon emissions tax. International Journal of Production Research, 53(21), 6408-6420.
Esmaili, M., Allameh, Gh., Tajvidi, T. (2015). Using game theory for analyzing pricing models in closed-loop supply chain from short- and long- term prespective. International Journal of Production Research, 54(7),2152-2169.
Figueira, J., Greco, S., Ehrgott, M. (2005). Multiple Criteria Decision Analysis. State of the Art Surveys. Springer-Verlag New York.
Hafezolkotob, A. (2018). Direct and indirect intervention schemas of government in the competition between green and non green supply chains. Journal of Cleaner Production, 70, 753-772.
Hafezalkotob, A. (2015). Competition of two green and regular supply chains under environmental protection and revenue seeking policies of government. Computer Industrial Engineering, 82, 103-114.
Hafezalkotob, A. (2017b). Competition of domestic manufacturer and foreign supplier under sustainable development objectives of government. Mathematics and Computation, 292, 294-308.
Hafezalkotob, A. (2017a). Competition, cooperation, and coopetition of green supply chains under regulations on energy saving levels. Transportation research Part E logist, 97, 228-250.
Hua, G., Wang, S., Cheng, T.C.E. (2010). Price and lead time decisions in dual-channel supply chains. European Journal of Operational Research, 205(1), 113–126.
Jamali, M., & Rasti, M. (2018). A game theoretic approach for green and non-green product pricing in chain-to-chain competitive sustainable and regular dual-channel supply chains. Journal of Cleaner Production, 170, 1029-1043.
Lee, C.H., Rhee, B.D. (2007). Channel coordination using product returns for a supply chain with stochastic salvage capacity. European Journal of Operational Research, 177(1), 214–238.
Lee, E.S., Shih, H.S. (2001). Fuzzy and Multi-level Decision Making: an Interactive Computational Approach. Advanced Manufacturing Series, Springer.
Lu, Z., & Shao, S. (2016). Impacts of government subsidies on pricing and performance level choice in Energy Performance Contracting: A two-step optimal decision model. Applied Energy, 184, 1176-1183.
Li, B., Zhu, M., Jiang, Y., & Li, Z. (2016). Pricing policies of a competitive dual-channel green supply chain. Journal of Cleaner Production,112 (3), 2029-2042.
Madani, R., Rasti-Barzoki, M. (2017). Sustainable supply chain management with pricing, greening and governmental tariffs determining strategies: A game-theoretic approach. Journal of Computers & Industrial Engineering, 105, 287–298.
New, S., Green, K., & Morton, B. (2002). An analysis of private versus public sector responses to the environmental challenges of the supply chain. Journal of Public Procurement,2(1), 93-99.
Shaw, K., Irfan, M., Shankar, R., & Yadav, S.S. (2016). Low carbon chance constrained supply chain network design problem: a Benders decomposition based approach. Computers & Industrial Engineering, 98(c), 483-497.
Sherali, H.D., Soyster, A.L., Murphy, F.H. (1983). Stackelberg-nash-cournot equilibria: characterizations and computations. Operational research, 31(2), 253-276.
Sheu, J., Chen, Y.J. (2012). Impact of government financial intervention on competition among green supply chains. International Journal of Production Economics, 138(1),  201-213.
Sheu, J. (2011). Bargaining framework for competitive green supply chains under governmental financial intervention. Transportation research Part E logist, 47(5), 573-592.
Sinai, M., & Rasti, M. (2018). Pricing and greening policies in the supply chain of green and non-green products with government intervention: The game theory approach. Journal of Industrial Engineering and Management, DOI: 10.24200/J65.2018.20083. (in Persian)
Taylor, S.R. (1992). Green management: the next competitive weapon. Journal of Futures, 24(7), 669-680.
Wu, D.D. (2013). Bargaining in supply chain with price and promotional effort dependent demand. Mathematical and Computer Modelling, 58(9-10), 1659–1669.
Xu, L., Mathiyazhagan, K., Govindan, K., Noorul Haq, A., Ramachandran, N.V. and Ashokkumar, A. (2013). Multiple comparative studies of Green Supply Chain Management: Pressures analysis. Journal of Resources, Conservation and Recycling, 78, 26-35.
 
Yao, D.Q., Liu, J.J. (2005). Competitive pricing of mixed retail and e-tail distribution channels. Omega, 33(3), 235–247.
Zhang, CH., Liu, L. (2013). Research on coordination mechanism in three-level green supply chain under non-cooperative game. Applied Mathematical Modelling, 37(5) 3369–3379.
Zhao, R., Neighbour, G., Han J., McGuire, M., & Deutz P. (2012). Using game theory to describe strategy selection for environmental risk and carbon emissions reduction in the green supply chain. Journal of Loss Prevention in the Process Industries, 25(6), 927-936.
Zhou, Y. (2018). The role of green customers under competition: A mixed blessing? Journal of Cleaner Production, 170, 857-866.
Zhu, Q. H. & Dou, Y.J. (2007). Evolutionary Game Model between Governments and Core Enterprises in Greening Supply Chains. Systems Engineering - Theory & Practice, 27(12), 85-89.
 
 
 
 
Industrial Management Journal
Volume 10, Issue 2
2018
Pages 297-314

Files

Share

How to cite

Statistics