Pricing and Low-Carbon Investment Decisions in an Emission Dependent Supply Chain under a Carbon Labelling Scheme

Yonghong Cheng, Hui Sun, Jeff Jia*, Lenny Koh

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)

3 Citations (Scopus)
180 Downloads (Pure)

Abstract

A low-carbon policy attracts the interests of businesses, consumers, and policy makers. The purpose of this paper is to investigate how a carbon labelling scheme could be integrated into operational decision-making for manufacturers and retailers. Three game theoretic models of a supply chain with one manufacturer and one retailer are built to investigate a manufacturer and retailer's pricing and investment decision for products with different initial carbon footprints considering consumer environmental awareness. Through a systematic comparison and numerical analysis, the results show that a carbon labelling scheme can significantly reduce the overall carbon emission supply chain and have an initially negative impact on the manufacturer and retailer's profits. However, in the medium-long run, manufacturers and retailers could yet achieve profitability through continuously investing in low-carbon technology.

Original languageEnglish
Article number1238
Number of pages17
JournalSustainability
Volume10
Issue number4
Early online date18 Apr 2018
DOIs
Publication statusPublished - Apr 2018

Keywords

  • Carbon labelling scheme
  • Consumer environmental awareness
  • Game theory
  • Product carbon footprint (PCF)
  • Supply chain

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