A Supply Chain Coordination Optimization Model with Revenue Sharing and Carbon Awareness

Nistha Kumari, Yogendra Kumar Rajoria (), Anand Chauhan, Satya Jeet Singh, Anubhav Pratap Singh and Vineet Kumar Sharma
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Nistha Kumari: Department of Mathematics, Graphic Era Deemed University, Dehradun 248002, India
Yogendra Kumar Rajoria: Department of Mathematics, School of Basic & Applied Sciences (SBAS), K. R. Mangalam University, Gurugram 122103, India
Anand Chauhan: Department of Mathematics, Graphic Era Deemed University, Dehradun 248002, India
Satya Jeet Singh: Department of Mathematics, Graphic Era Deemed University, Dehradun 248002, India
Anubhav Pratap Singh: Department of Mathematics, S.G.R.R. (P.G.) College, Dehradun 248001, India
Vineet Kumar Sharma: Department of Applied Sciences, G. L. Bajaj Institute of Technology and Management, Greater Noida 201306, India

Sustainability, 2024, vol. 16, issue 9, 1-27

Abstract: The present study explores the impact of carbon emissions on supply chain coordination, where the supply chain entities are a retailer and a distributor. The study also involves two types of systems, namely centralized and decentralized. A centralized system computes the profit of the entire supply chain, including the profit of a retailer and a distributor, using the traditional optimization technique. In contrast, a decentralized system computes the profit of both a retailer and a distributor independently and uses the Stackelberg sequence for profit optimization. According to the Stackelberg sequence, one entity is considered a leader and the other a follower. When the profit in both systems is compared, it is found to be higher in the centralized system. So, to coordinate the system, a revenue-sharing contract is applied to coordinate the supply chain under a stock–time–price-sensitive demand rate. Finally, a carbon emission cost is implemented to the profits of both systems to make the model more sustainable. The main objective of the research is to optimize the profit of the supply chain by considering the concept of revenue-sharing contracts and making the system more sustainable through the implementation of carbon emission cost. The overall study concludes that the revenue-sharing fraction ‘ δ ’ helps in coordinating the system and 0.4 is the value of the revenue-sharing fraction ‘ δ ’ that perfectly coordinates the system. Due to this coordination, both the parties will gain profit, i.e., retailer and distributor, and this whole phenomenon increases the profit of the supply chain. A sensitivity analysis is also performed to check the stability of the model, and the model is found to be quite stable. A numerical example is illustrated, providing the result of the model.

Keywords: supply chain coordination; centralized and decentralized system; revenue sharing; carbon emission; time-dependent demand; optimization (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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