Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Price premium effect, supply contracts and strategic decision making under environmental considerations

Price premium effect, supply contracts and strategic decision making under environmental... The purpose of this paper is to study the impact of collaboration between supply chain entities in a dyadic setting where the manufacturer invests in greening and technology adoption effort leading to a price premium effect for the supply chain players.Design/methodology/approachThe paper uses game theoretic approach to analyze the model of inter-firm interaction in a vertical channel setting consisting of a retailer and manufacturer. The paper studies strategic decisions of the channel members in a decentralized and centralized structure and extends this to decision making under contractual settings.FindingsA two-part tariff completely coordinates the green supply chain, while a cost sharing and revenue sharing contract only achieve partial coordination. Nevertheless, a cost sharing, as well as a revenue sharing contract, increases the greening and technological adoption effort by the manufacturer while yielding the supply chain members a strictly larger profit. Furthermore, a revenue sharing contract in comparison to a cost sharing contract, leads to a larger greening and technological adoption effort by the manufacturer, lower wholesale and retail prices and a strictly larger profit for both the manufacturer and the retailer.Originality/valueThis paper contributes to the green supply chain pricing, technology and contract literature considering strategic interactions between a manufacturer and retailer in a supply chain under price premium effects of greening activities and technological advancements. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Benchmarking: An International Journal Emerald Publishing

Price premium effect, supply contracts and strategic decision making under environmental considerations

Loading next page...
 
/lp/emerald-publishing/price-premium-effect-supply-contracts-and-strategic-decision-making-UYSo8oiai8
Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1463-5771
DOI
10.1108/bij-12-2018-0427
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to study the impact of collaboration between supply chain entities in a dyadic setting where the manufacturer invests in greening and technology adoption effort leading to a price premium effect for the supply chain players.Design/methodology/approachThe paper uses game theoretic approach to analyze the model of inter-firm interaction in a vertical channel setting consisting of a retailer and manufacturer. The paper studies strategic decisions of the channel members in a decentralized and centralized structure and extends this to decision making under contractual settings.FindingsA two-part tariff completely coordinates the green supply chain, while a cost sharing and revenue sharing contract only achieve partial coordination. Nevertheless, a cost sharing, as well as a revenue sharing contract, increases the greening and technological adoption effort by the manufacturer while yielding the supply chain members a strictly larger profit. Furthermore, a revenue sharing contract in comparison to a cost sharing contract, leads to a larger greening and technological adoption effort by the manufacturer, lower wholesale and retail prices and a strictly larger profit for both the manufacturer and the retailer.Originality/valueThis paper contributes to the green supply chain pricing, technology and contract literature considering strategic interactions between a manufacturer and retailer in a supply chain under price premium effects of greening activities and technological advancements.

Journal

Benchmarking: An International JournalEmerald Publishing

Published: May 21, 2021

Keywords: Technology; Green supply chain; Revenue sharing; Price premium; Cost sharing; Stackelberg game

References