Next Article in Journal
Using GIS towards the Characterization and Soil Mapping of the Caia Irrigation Perimeter
Next Article in Special Issue
Optimal Financing Decisions of Two Cash-Constrained Supply Chains with Complementary Products
Previous Article in Journal
Legal Opportunities for Public Participation in Forest Management in the Republic of Korea
Previous Article in Special Issue
Weighing Efficiency-Robustness in Supply Chain Disruption by Multi-Objective Firefly Algorithm
Open AccessArticle

Supply Chain Coordination and Consumer Awareness for Pollution Reduction

Operations Strategy and Management Science, KAIST Business School, Seoul 02455, Korea
Author to whom correspondence should be addressed.
Academic Editor: Young Hae Lee
Sustainability 2016, 8(4), 365;
Received: 15 March 2016 / Revised: 10 April 2016 / Accepted: 12 April 2016 / Published: 15 April 2016
(This article belongs to the Special Issue Sustainability in Supply Chain Management)
To understand the dynamics of the manufacturer’s effort to reduce pollution in a supply chain consisting of manufacturer, retailer, and consumers, we analyze four cases according to consumer awareness of the pollution’s harmful effect, i.e., environmentally aware versus ignorant, and supply chain coordination, i.e., competitive versus cooperative. Applying differential games, we derive managerial implications: the most significant is that the supply chain coordination strategy becomes irrelevant to reducing the pollution, if the consumers are not environmentally aware or sensitive enough. It highlights the critical role played by the consumer awareness in curbing the pollution in the supply chain. In addition, we find the transfer price and the potential market size are important factors to determine each case’s relative effectiveness. Under a regular condition, where the transfer price from the retailer to the manufacturer is sufficiently high, the consumer-aware and competitive case can generate a better outcome in reducing the pollution than those with ignorant consumers. However, the opposite might occur if the transfer price is excessively low, giving the manufacturer little motivation to make an effort to reduce the pollution. For the cooperative supply chain, it is the potential market size that determines whether the consumer-aware case is better than the consumer-ignorant. In fact, it turns out that there is a stronger result, i.e., the feasibility condition enforces that the market is always big enough to make the consumer-aware cooperative case better than the consumer-ignorant cases. We further discuss managerial as well as policy implications of these analysis outcomes. View Full-Text
Keywords: pollution reduction; supply chain coordination; consumer awareness pollution reduction; supply chain coordination; consumer awareness
Show Figures

Figure 1

MDPI and ACS Style

Kim, B.; Sim, J.E. Supply Chain Coordination and Consumer Awareness for Pollution Reduction. Sustainability 2016, 8, 365.

Show more citation formats Show less citations formats
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Article Access Map by Country/Region

Search more from Scilit
Back to TopTop