Pricing and greening strategies in a dual-channel supply chain with government tariffs and cannibalisation under demand uncertainty

Amit Ranjan, Anand Ranjan and J.K. Jha

European Journal of Industrial Engineering, 2025, vol. 19, issue 2, 237-271

Abstract: In light of the drastic exhaustion of natural resources and increased environmental pollution, to promote the use of green products, the government subsidises them and levies taxes on non-green ones. This paper considers a dual-channel supply chain with a manufacturer selling a green product online and a substitutable non-green product offline using a retail channel. The price differential splits the market into two segments. The stochastic linear demand is modelled as a function of prices, green quality level, and sales effort level, considering government tariffs and demand leakage. A centralised decision model is investigated for the case of uniform distribution and distribution-free demand. It is shown that the green quality level and the total supply chain profit increase with an increase in demand leakage. Also, it reveals that with an increment in government subsidy and tax, the total supply chain profit and green quality level are higher in uniform distribution. [Received: 20 April 2023; Accepted: 9 October 2023]

Keywords: dual-channel supply chain; government tariffs; cannibalisation; uniform distribution; distribution-free. (search for similar items in EconPapers)
Date: 2025
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