Impact of green retail operations on the profit of the manufacturer and the retailer under different pricing strategies

T. M. Rofin (), Maheswar Singha Mahapatra () and Biswajit Mahanty ()
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T. M. Rofin: National Institute of Technology Karnataka
Maheswar Singha Mahapatra: Indian Institute of Technology
Biswajit Mahanty: Indian Institute of Technology

OPSEARCH, 2021, vol. 58, issue 1, No 7, 125-143

Abstract: Abstract The increasing customer awareness of environmental sustainability has motivated retailers to engage in green practices. In this paper, we consider a retailer involved in green retailing operations under a dual-channel supply chain framework under which the manufacturer is selling through an e-marketplace and a retailer. We investigate the impact of green retailing operations on the profit of the supply chain members for consistent pricing strategy and inconsistent pricing strategy using a non-linear demand function. We resort to a bi-level genetic algorithm for the solutions. Through a numerical example, we have quantified the profit of the chain members and assessed the impact of the retailer’s engagement in green retail operations on the profit of the chain members. We have also carried out a sensitivity analysis of the profit of the chain members for the rapidly evolving customer preference for e-marketplace. From the numerical illustration, we found that (1) it is beneficial for the retailer to engage in green retail operations irrespective of the pricing strategy (2) retailer’s engagement in green retail operations reduces the profit of the manufacturer regardless of the pricing strategy of the retailer.

Keywords: Green retailing; Dual-channel supply chain; Pricing strategy; Stackelberg game; Bi-level GA (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s12597-020-00478-1

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