Multiperiod supply chain network dynamics under investment in sustainability, externality cost, and consumers’ willingness to pay

Dong Li and Jose M. Cruz

International Journal of Production Economics, 2022, vol. 247, issue C

Abstract: This paper analyzes the multiperiod effects of a multi-tier supply chain network's economic, social, and environmental decision-making. The network consists of suppliers, manufacturers, and retailers who are multicriteria decision-makers. They are constrained by externality costs in taxation and consumers' preferences and willingness to pay for sustainable products. We develop an optimization model that allows us to investigate the interplay of different decision-makers and to compute the resultant network equilibrium pattern of productions, transactions, inventory levels, prices, and sustainability levels in the network over the multiperiod planning horizon. The numerical study simulates and analyzes the effects of consumers' willingness to pay, externality cost, production capacity, NPV (net present value) discount rate, sustainability investment, and the structure of the supply chain network, on the economic, social, and environmental sustainability.

Keywords: Supply chain sustainability; Triple bottom line; Network externality; Consumers' willingness to pay; Network equilibrium; Multicriteria decision-making (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:247:y:2022:i:c:s0925527322000342

DOI: 10.1016/j.ijpe.2022.108441

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