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Sustainability 2016, 8(1), 48; doi:10.3390/su8010048

Stochastic Pricing and Order Model with Transportation Mode Selection for Low-Carbon Retailers

1
School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 611731, China
2
Department of Industrial Engineering, School of Construction and Management Engineering, Xihua University, Chengdu 610039, China
3
Business School, Sichuan University, Chengdu 610065, China
*
Author to whom correspondence should be addressed.
Academic Editor: Giuseppe Ioppolo
Received: 29 October 2015 / Revised: 27 December 2015 / Accepted: 29 December 2015 / Published: 6 January 2016
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
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Abstract

More and more enterprises have begun to pay attention to their carbon footprint in the supply chain, of which transportation has become the second major source of carbon emissions. This paper aims to study both optimum pricing and order quantities, considering consumer demand and the selection of transportation modes by retailers, in terms of carbon emissions sensitivity and price sensitivity under the conditions of a cap-and-trade policy and uncertain market demand. Firstly, we analyze the effects of transportation mode (including transportation costs and transportation-induced carbon emissions), initial emissions allowances, carbon emissions trading price and consumer sensitivity to carbon emissions on the optimum decisions and profits of retailers. The results demonstrate that when consumers are less sensitive to price, the optimum retail price and the optimum order quantity of products are proportional to the transportation cost and transportation-induced carbon emissions of retailers per unit product, the carbon emissions trading price as well as consumer sensitivity to carbon emissions. However, when consumers are highly sensitive to price, the optimum order quantity of products is inversely proportional to the transportation costs and transportation-induced carbon emissions of retailers per unit product, the carbon emissions trading price and consumer sensitivity to carbon emissions. In addition, the optimum retail price of products is inversely proportional to consumer sensitivity to carbon emissions. We also find that retailers prefer a low-carbon transportation mode when the carbon emissions trading price is high. Meanwhile, the carbon emissions trading price influences the carbon emissions trading volume of retailers. These theoretical findings are further validated by some numerical analysis. View Full-Text
Keywords: stochastic demand; transportation mode; low-carbon retailers; pricing; order stochastic demand; transportation mode; low-carbon retailers; pricing; order
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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Zheng, Y.; Liao, H.; Yang, X. Stochastic Pricing and Order Model with Transportation Mode Selection for Low-Carbon Retailers. Sustainability 2016, 8, 48.

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