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Sustainability 2015, 7(12), 16340-16361; doi:10.3390/su71215818

Sustainable Trade Credit and Replenishment Policies under the Cap-And-Trade and Carbon Tax Regulations

School of Business, Tianjin University of Finance and Economics, Tianjin 300222, China
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Author to whom correspondence should be addressed.
Academic Editors: Kannan Govindan and Marc A. Rosen
Received: 16 September 2015 / Revised: 27 November 2015 / Accepted: 3 December 2015 / Published: 10 December 2015
(This article belongs to the Special Issue How Better Decision-Making Helps to Improve Sustainability)
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Abstract

The paper considers the sustainable trade credit and inventory policies with demand related to credit period and the environmental sensitivity of consumers under the carbon cap-and-trade and carbon tax regulations. First, the decision models are constructed under three cases: without regulation, carbon cap-and-trade regulation, and carbon tax regulation. The optimal solutions of the retailer in the three cases are then discussed under the exogenous and endogenous credit periods. Finally, numerical analysis is conducted to obtain conclusions. The retailer shortens the trade credit period as the environmental sensitivity of the consumer is enhanced. The cap has no effects on the credit period decisions under the carbon cap-and-trade regulation. Carbon trade price and carbon tax have negative effects on the credit period. The retailer under carbon cap-and-trade regulation is more motivated to obey regulations than that under carbon tax regulation when carbon trade price equals carbon tax. Carbon regulations have better effects on carbon emission reduction than with exogenous credit term when the retailer has the power to decide with regards credit policies. View Full-Text
Keywords: cap-and-trade regulation; carbon tax regulations; trade credit; inventory policies cap-and-trade regulation; carbon tax regulations; trade credit; inventory policies
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Qin, J.; Bai, X.; Xia, L. Sustainable Trade Credit and Replenishment Policies under the Cap-And-Trade and Carbon Tax Regulations. Sustainability 2015, 7, 16340-16361.

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