Coordinating a Two-Echelon Supply Chain under Carbon Tax

Wei Yu and Ruizhu Han
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Wei Yu: School of Economics and Management, Southeast University, Nanjing 210018, China
Ruizhu Han: School of Economics and Management, Southeast University, Nanjing 210018, China

Sustainability, 2017, vol. 9, issue 12, 1-13

Abstract: In this paper, we study the impact of carbon tax on carbon emission and retail price in a two-echelon supply chain consisting of a manufacturer and a retailer. Specifically, by adopting two types of contracts, i.e., the modified wholesale price (MW) and the modified cost-sharing contract (MS), supply chain coordination is achieved, which promotes the supply chain efficiency. Our study shows that: (1) with the increase of carbon tax, both the optimal emission reduction level and the optimal retail price increase, and then keep unchanged; (2) neither MW nor MS benefits the manufacturer after the supply chain coordination; and (3) to effectively coordinate the supply chain, we propose an innovative supply chain contract that integrates the firms’ optimal decisions under MW or MS with a two part tariff contract (TPT) and a fixed fee the retailer can pay to ensure a win–win solution.

Keywords: carbon tax; modified wholesale price contract; modified cost-sharing contract; two-part tariff contract; channel coordination (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 (1)

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