Sustainability Analysis of Supply Chains with Fashion Products under Alternative Power Structures and Loss-Averse Supplier

Baozhuang Niu, Lei Chen and Jie Zhang
Additional contact information
Lei Chen: School of Business Administration, South China University of Technology, Guangzhou 510320, China
Jie Zhang: School of Business Administration, Guangdong University of Finance and Economics, Guangzhou 510320, China

Sustainability, 2017, vol. 9, issue 6, 1-19

Abstract: Considering a supply chain with fashion products comprising of a supplier and a retailer, we study the sustainability of the supply chain with alternative power structures (either the supplier or the retailer has the option of acting as a leader to make the decisions first). We also examine the impact of the supplier’s attitudes to loss on the supply chain’s sustainability and profitability. We build game theoretical modes to characterize one property of the fashion industry: the wide use of buy-back contract, and obtain the following results: (1) Compared to wholesale price contract, buy-back contract reduces the sustainability of the supply chain, and this result is robust with alternative power structures. (2) Under alternative power structure, the sustainability index is increasing in the buy-back price in the supplier-as-the-leader scenario, while decreasing in the retailer-as-the-leader scenario. That is, the relationships between sustainability and buy-back price is completely reversed when the leader is changed. (3) The sustainability is improved when the supplier acts as the leader and the buy-back price is lower than a threshold, but the contrary holds when the buy-back price is high. (4) Buy-back contract helps to improve the sustainability of the supply chain when supplier is extremely loss-averse, because the loss-averse supplier has the incentives to reduce the ordering quantity as well as the overstocking risk.

Keywords: sustainability; power structure; buy-back contract; attitude to loss (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.mdpi.com/2071-1050/9/6/995/pdf (application/pdf)
https://www.mdpi.com/2071-1050/9/6/995/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:9:y:2017:i:6:p:995-:d:101022

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().