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Collaborative mechanism on profit allotment and public health for a sustainable supply chain

Huiping Ding, Li Wang and Lucy Zheng

European Journal of Operational Research, 2018, vol. 267, issue 2, 478-495

Abstract: This paper explores the collaborative mechanism that motivates supply chain firms to collectively invest in environmental technology and produce environmental friendly products (EFPs) to reduce pollutant emissions and negative impacts on environment and public health. Our paper investigates how such firms can achieve the balance between economic feasibility and environmental and social sustainability under multiple sustainable constraints in terms of the triple bottom line dimensions. The work also describes the impacts of interrelated multiple sustainable constraints on optimal policy for the supply chain transfer price and profit allotment decisions. The case for the sustainable supply chain with multiple supplies assuming no competitions between suppliers is also addressed. Our findings suggest that government intervention plays a dominant role in governing the supply chain firms’ behaviors in the context of environmental and public health sustainability. The profit allotment is determined through the process of negotiation of the transfer price interrelated with the government subsidy sharing between the supply chain firms.

Keywords: Supply chain management; Sustainable constraints; Public health; Transfer price; Profit allotment (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:ejores:v:267:y:2018:i:2:p:478-495