Differential Pricing and Emission Reduction in Remanufacturing Supply Chains with Dual-Sale Channels under CCT-Mechanism

Kaifu Yuan, Guangqiang Wu, Hui Dong, Bo He and Dafei Wang
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Kaifu Yuan: School of Business Administration, Guizhou University of Finance and Economics, Guiyang 550025, China
Guangqiang Wu: School of Business Administration, Guizhou University of Finance and Economics, Guiyang 550025, China
Hui Dong: School of Business Administration, Guizhou University of Finance and Economics, Guiyang 550025, China
Bo He: School of Economics and Business Administration, Chongqing University, Chongqing 400000, China
Dafei Wang: School of Business Administration, Guizhou University of Finance and Economics, Guiyang 550025, China

Sustainability, 2020, vol. 12, issue 19, 1-27

Abstract: In order to make optimal decisions for pricing and emission reduction, a remanufacturing supply chain system with dual-sale channels is investigated. With regard to the preferences of consumers for different channels and carbon cap-and-trade mechanisms, profit-maximization models are developed on supply chain members and systems in decentralized and centralized cases. Based on a backward induction, the corresponding formulae for decision variables are obtained. Then the effect of the industry emission control coefficient is analyzed and the optimal decisions of two cases are compared. Finally, the coordination mechanism and numerical analysis are presented. The result indicates that: (1) As the free carbon allowances granted by the government to the manufacturer increases, the investment in carbon reduction from the manufacturer will increase. As the industry emission control coefficient increases, the carbon emissions per product and the prices of new and remanufactured products will decrease, while the demands of the new and remanufactured products and the profits of supply chain members and systems will increase. (2) As the direct sale channel preference coefficient increases, the profits of the manufacturer and the system will increase while the retailer’s profit will decrease. Correspondingly, the carbon emissions of unit product will decrease, and the sales of the direct sale channel will increase while the sales of the retail channel will decrease. (3) The decision in the coordinated case not only ensures emission reduction and system profit to reach the level of the centralized case, but also raises the profits of supply chain members in the decentralized case. Therefore, it is preferable to other decisions. (4) As the carbon trading price increases, the emission reduction investment from the manufacturer will increase while the profits of the supply chain and its members will increase.

Keywords: remanufacturing supply chains; carbon cap-and-trade mechanism; dual-sale channels; differential pricing; carbon emissions (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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