# Economic and Environmental Performance of Fashion Supply Chain: The Joint Effect of Power Structure and Sustainable Investment

^{1}

^{2}

^{*}

## Abstract

**:**

## 1. Introduction

## 2. Literature Review

## 3. Modeling Framework

- The manufacturer makes sustainable investment.$${\Pi}_{r}^{m}\left(p\right)=\left(p-w\right)Q=\left(p-w\right)\left(\alpha -\beta p+\gamma e\right)$$$${\Pi}_{m}^{m}\left(w,e\right)=\left(w-c-T\left(e\right)\right)Q-I\left(e\right)=\left(w-c+te\right)\left(\alpha -\beta \left(w+m\right)+\gamma e\right)-\lambda {e}^{2}$$
- The retailer makes sustainable investment.$${\Pi}_{r}^{r}\left(p,e\right)=\left(p-w\right)Q-I\left(e\right)=\left(p-w\right)\left(\alpha -\beta p+\gamma e\right)-\lambda {e}^{2}$$$${\Pi}_{m}^{r}\left(w\right)=\left(w-c-T\left(e\right)\right)Q=\left(w-c+te\right)\left(\alpha -\beta \left(w+m\right)+\gamma e\right)$$

## 4. The Manufacturer Makes Sustainable Investment

**Lemma**

**1.**

**Proposition**

**1.**

**Corollary**

**1.**

## 5. The Retailer Makes Sustainable Investment

**Lemma**

**2.**

**Proposition**

**2.**

**Corollary**

**2.**

## 6. The Supply Chain Members’ Sustainable Investment Decisions

**Lemma**

**3.**

**Proposition**

**3.**

- 1.
- In the MS power structure, the retailer benefits from her sustainable investment if the investment factor is relatively low (i.e., ${\Pi}_{r}^{r}\left({p}_{m}^{r},{e}_{m}^{r}\right)>{\Pi}_{r}^{m}\left({p}_{m}^{m}\right)$, if $\lambda <\widehat{\lambda}$), where:$$\widehat{\lambda}=\frac{{\left(\gamma +\beta t\right)}^{2}\sqrt{4\beta \widehat{\lambda}-{\gamma}^{2}}}{8{\beta}^{2}t}.$$
- 2.
- In the VN power structure, the retailer benefits from the manufacturer’s sustainable investment (i.e., ${\Pi}_{r}^{r}\left({p}_{n}^{r},{e}_{n}^{r}\right)<{\Pi}_{r}^{m}\left({p}_{n}^{m}\right)$). The manufacturer’s profit is higher when the retailer makes sustainable investment (i.e., ${\Pi}_{m}^{m}\left({w}_{n}^{m},{e}_{n}^{m}\right)<{\Pi}_{m}^{r}\left({w}_{n}^{r}\right)$).
- 3.
- In the RS power structure, the optimal profits of both the retailer and the manufacturer are higher when the manufacturer makes sustainable investment (i.e., ${\Pi}_{m}^{m}\left({w}_{r}^{m},{e}_{r}^{m}\right)>{\Pi}_{m}^{r}\left({w}_{r}^{r}\right)$ and ${\Pi}_{r}^{r}\left({p}_{r}^{r},{e}_{r}^{r}\right)<{\Pi}_{r}^{m}\left({p}_{r}^{m}\right)$).

**Proposition**

**4.**

- 1.
- In the MS power structure, the manufacturer’s sustainable investment is higher than the retailer’s (i.e., ${e}_{m}^{m}>{e}_{m}^{r}$) if $\gamma <\widehat{\gamma}$, while the retailer makes higher investment (i.e., ${e}_{m}^{r}\ge {e}_{m}^{m}$if $\gamma \ge \widehat{\gamma}$. Here, $\widehat{\gamma}$ is obtained by solving the following equation: $8t\lambda {\beta}^{2}-\gamma {\left(\gamma +t\beta \right)}^{2}=0.$
- 2.
- In the VN power structure, the manufacturer’s sustainable investment is higher than the retailer’s (i.e., ${e}_{n}^{m}>{e}_{n}^{r}$);
- 3.
- In the RS power structure, the manufacturer’s sustainable investment is higher than the retailer’s (i.e., ${e}_{r}^{m}>{e}_{r}^{r}$).

## 7. Conclusions and Future Research

## Acknowledgments

## Author Contributions

## Conflicts of Interest

## Appendix A

**Proof of Lemma**

**1.**

**Proof of Proposition**

**1.**

- From Lemma 1, we have ${w}_{n}^{m}-{w}_{m}^{m}=\frac{2\lambda \left(\alpha -\beta c\right)\left({\gamma}^{2}+\beta \gamma t-4\lambda \beta \right)}{[8\beta \lambda -{\left(\gamma +\beta t\right)}^{2}][6\beta \lambda -{\left(\gamma +\beta t\right)}^{2}]}<0,$ that is ${w}_{m}^{m}>{w}_{n}^{m}$. Similarly, from Lemma 1, we have ${w}_{n}^{m}-{w}_{r}^{m}=\frac{\left(\alpha -\beta c\right)\left(2\lambda -\beta {t}^{2}-\gamma t\right)[2\beta \lambda -{\left(\gamma +\beta t\right)}^{2}]}{[8\beta \lambda -2{\left(\gamma +\beta t\right)}^{2}][6\beta \lambda -{\left(\gamma +\beta t\right)}^{2}]}>0$, that is ${w}_{n}^{m}>{w}_{r}^{m}$. Thus, ${\mathrm{w}}_{m}^{m}>{w}_{n}^{m}>{w}_{r}^{m}$.
- From Lemma 1, we have ${e}_{n}^{m}-{e}_{r}^{m}=\frac{\left(\alpha -\beta c\right)\left(\gamma +\beta t\right)[2\beta \lambda -{\left(\gamma +\beta t\right)}^{2}]}{[8\beta \lambda -2{\left(\gamma +\beta t\right)}^{2}][6\beta \lambda -{\left(\gamma +\beta t\right)}^{2}]}>0$, that is ${e}_{n}^{m}>{e}_{r}^{m}$. Similarly, we have ${e}_{r}^{m}-{e}_{m}^{m}=\frac{\left(\alpha -\beta c\right)\left(\gamma +\beta t\right){\left(\gamma +\beta t\right)}^{2}}{[8\beta \lambda -{\left(\gamma +\beta t\right)}^{2}][8\beta \lambda -2{\left(\gamma +\beta t\right)}^{2}]}>0$, that is, ${e}_{r}^{m}>{e}_{m}^{m}$. Thus, ${e}_{n}^{m}>{e}_{r}^{m}>{e}_{m}^{m}$.
- From Lemma 1, we have ${p}_{m}^{m}-{p}_{r}^{m}=\frac{\left(\alpha -\beta c\right)\left(2\beta \lambda -{\gamma}^{2}-\beta \gamma t\right){\left(\gamma +\beta t\right)}^{2}}{\beta [8\beta \lambda -2{\left(\gamma +\beta t\right)}^{2}][8\beta \lambda -{\left(\gamma +\beta t\right)}^{2}]}>0$, that is ${p}_{m}^{m}>{p}_{r}^{m}$. Similarly, we have ${p}_{r}^{m}-{p}_{n}^{m}=\frac{\left(\alpha -\beta c\right)[2\beta \lambda -{\left(\gamma +\beta t\right)}^{2}]\left(2\beta \lambda -{\gamma}^{2}-\beta \gamma t\right)}{\beta [8\beta \lambda -2{\left(\gamma +\beta t\right)}^{2}][6\beta \lambda -{\left(\gamma +\beta t\right)}^{2}]}>0$, that is ${p}_{r}^{m}>{p}_{n}^{m}$, so ${p}_{m}^{m}>{p}_{r}^{m}>{p}_{n}^{m}$. This completes the proof.

**Proof of Corollary**

**1.**

- From Lemma 1 and Equation (4), we obtain the manufacturer’s optimal profit in a MS power structure as ${\pi}_{m}^{m}\left({w}_{m}^{m},{e}_{m}^{m}\right)=\frac{\lambda {\left(\alpha -\beta c\right)}^{2}}{8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}}$. The manufacturer’s optimal profit in a VN power structure is ${\pi}_{m}^{m}\left({w}_{n}^{m},{e}_{n}^{m}\right)=\frac{[4{\lambda}^{2}\beta -\lambda {\left(\gamma +t\beta \right)}^{2}]{\left(\alpha -\beta c\right)}^{2}}{{[6\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}}$, and his optimal profit in a RS power structure is ${\pi}_{m}^{m}\left({w}_{r}^{m},{e}_{r}^{m}\right)=\frac{\lambda {\left(\alpha -\beta c\right)}^{2}}{4[4\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}$. Then ${\pi}_{m}^{m}\left({w}_{m}^{m},{e}_{m}^{m}\right)-{\pi}_{m}^{m}\left({w}_{n}^{m},{e}_{n}^{m}\right)=\frac{4{\beta}^{2}{\lambda}^{3}{\left(\alpha -\beta c\right)}^{2}}{{[6\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}{[8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}}>0$, so that, ${\pi}_{m}^{m}\left({w}_{m}^{m},{e}_{m}^{m}\right)>{\pi}_{m}^{m}\left({w}_{n}^{m},{e}_{n}^{m}\right)$. Similarly, ${\pi}_{m}^{m}\left({w}_{n}^{m},{e}_{n}^{m}\right)-{\pi}_{m}^{m}\left({w}_{r}^{m},{e}_{r}^{m}\right)=\frac{\lambda {\left(\alpha -\beta c\right)}^{2}[14\beta \lambda -3{\left(\gamma +t\beta \right)}^{2}][2\beta \lambda -{\left(\gamma +t\beta \right)}^{2}]}{{[6\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}{[8\lambda \beta -2{\left(\gamma +t\beta \right)}^{2}]}^{2}}>0$, therefore, ${\pi}_{m}^{m}\left({w}_{n}^{m},{e}_{n}^{m}\right)>{\pi}_{m}^{m}\left({w}_{r}^{m},{e}_{r}^{m}\right)$. Then ${\pi}_{m}^{m}\left({w}_{m}^{m},{e}_{m}^{m}\right)>{\pi}_{m}^{m}\left({w}_{n}^{m},{e}_{n}^{m}\right)>{\pi}_{m}^{m}\left({w}_{r}^{m},{e}_{r}^{m}\right)$.
- From Lemma 1 and Equation (3), notice that the retailer’s maximum profit in a MS power structure is ${\pi}_{r}^{m}\left({p}_{m}^{m}\right)=\frac{4{\lambda}^{2}\beta {\left(\alpha -\beta c\right)}^{2}}{{[8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}}$. Her optimal profits in a VN power structure and in a RS power structure are: ${\pi}_{r}^{m}\left({p}_{n}^{m}\right)=\frac{4{\lambda}^{2}\beta {\left(\alpha -\beta c\right)}^{2}}{{[6\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}}$ and ${\pi}_{r}^{m}\left({p}_{r}^{m}\right)=\frac{\lambda {\left(\alpha -\beta c\right)}^{2}}{8\lambda \beta -2{\left(\gamma +t\beta \right)}^{2}}$, respectively. We have ${\pi}_{r}^{m}\left({p}_{n}^{m}\right)-{\pi}_{r}^{m}\left({p}_{m}^{m}\right)=\frac{16{\beta}^{2}{\lambda}^{3}{\left(\alpha -\beta c\right)}^{2}[7\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}{{[6\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}{[8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}}>0$, so ${\pi}_{r}^{m}\left({p}_{n}^{m}\right)>{\pi}_{r}^{m}\left({p}_{m}^{m}\right)$. Similarly, ${\pi}_{r}^{m}\left({p}_{r}^{m}\right)-{\pi}_{r}^{m}\left({p}_{n}^{m}\right)=\frac{\lambda {\left(\alpha -\beta c\right)}^{2}{[2\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}}{{[6\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}[8\lambda \beta -2{\left(\gamma +t\beta \right)}^{2}]}>0$, hence, ${\pi}_{r}^{m}\left({p}_{r}^{m}\right)>{\pi}_{r}^{m}\left({p}_{n}^{m}\right)$. Then, ${\pi}_{r}^{m}\left({p}_{r}^{m}\right)>{\pi}_{r}^{m}\left({p}_{n}^{m}\right)>{\pi}_{r}^{m}\left({p}_{m}^{m}\right)$.

**Proof of Lemma**

**2.**

**Proof of Proposition**

**2.**

- 1.
- From Lemma 2, we have ${w}_{m}^{r}-{w}_{n}^{r}=\frac{\left(\alpha -\beta c\right)[{\gamma}^{2}\left({\gamma}^{2}-{\beta}^{2}{t}^{2}+6\beta \lambda \right)+2\beta \lambda \left(4\beta \lambda -\beta \gamma t\right)]}{2\beta [4\beta \lambda -\gamma \left(\gamma +\beta t\right)][6\beta \lambda -\gamma \left(\gamma +\beta t\right)]}>0$, then ${w}_{m}^{r}>{w}_{n}^{r}$. Similarly, we have ${w}_{n}^{r}-{w}_{r}^{r}=\frac{4\beta \lambda \left(\alpha -\beta c\right)\left(\lambda +\beta {t}^{2}-\gamma t\right)}{[8\beta \lambda -{\left(\gamma +\beta t\right)}^{2}][6\beta \lambda -\gamma \left(\gamma +\beta t\right)]}>0$, that is ${w}_{n}^{r}>{w}_{r}^{r}$. Thus, ${w}_{m}^{r}>{w}_{n}^{r}>{w}_{r}^{r}$.
- 2.
- From Lemma 2, ${e}_{n}^{r}-{e}_{m}^{r}=\frac{\gamma \left(\alpha -\beta c\right)[2\beta \lambda -\gamma \left(\gamma +\beta t\right)]}{2[4\beta \lambda -\gamma \left(\gamma +\beta t\right)][6\beta \lambda -\gamma \left(\gamma +\beta t\right)]}>0$, then we have: ${e}_{n}^{r}>{e}_{m}^{r}$. Similarly, we have ${e}_{n}^{r}-{e}_{r}^{r}=\frac{2\beta \lambda \left(\alpha -\beta c\right)\left(\gamma -3\beta t\right)}{[6\beta \lambda -\gamma \left(\gamma +\beta t\right)][8\beta \lambda -{\left(\gamma +\beta t\right)}^{2}]}$.
- (1)
- If $\gamma <3\beta t$, the above equation is negative, we have ${e}_{r}^{r}>{e}_{n}^{r}>{e}_{m}^{r}$.
- (2)
- If $\gamma >3\beta t$, the above equation is positive, we have ${e}_{n}^{r}>{e}_{r}^{r}$.

From Lemma 2, we have ${e}_{r}^{r}-{e}_{m}^{r}=\frac{\left(\alpha -\beta c\right)[8{\beta}^{2}\lambda t-\gamma {\left(\gamma +\beta t\right)}^{2}]}{2[4\beta \lambda -\gamma \left(\gamma +\beta t\right)][8\beta \lambda -{\left(\gamma +\beta t\right)}^{2}]}$.

- 3.
- From Lemma 2, we have ${p}_{m}^{r}-{p}_{n}^{r}=\frac{\left(\alpha -\beta c\right)[2\beta \lambda -\gamma \left(\gamma +\beta t\right)]\left(2\beta \lambda -{\gamma}^{2}\right)}{2\beta [4\beta \lambda -\gamma \left(\gamma +\beta t\right)][6\beta \lambda -\gamma \left(\gamma +\beta t\right)]}>0$, that is ${p}_{m}^{r}>{p}_{n}^{r}$. Similarly, we have: ${p}_{r}^{r}-{p}_{m}^{r}=\frac{\left(\alpha -\beta c\right)\left\{{\gamma}^{2}[2\beta \lambda -{\left(\gamma +\beta t\right)}^{2}]+2{\beta}^{2}\lambda t\left(4\gamma -\beta t\right)\right\}}{2\beta [4\beta \lambda -\gamma \left(\gamma +\beta t\right)][8\beta \lambda -{\left(\gamma +\beta t\right)}^{2}]}>0$, that is ${p}_{r}^{r}>{p}_{m}^{r}$. Then, ${p}_{r}^{r}>{p}_{m}^{r}>{p}_{n}^{r}$ holds. This completes the proof.

**Proof of Corollary**

**2.**

- From Lemma 2 and Equation (6), the manufacturer’s optimal profit in a MS power structure is ${\pi}_{m}^{r}\left({w}_{m}^{r}\right)=\frac{\lambda {\left(\alpha -\beta c\right)}^{2}}{8\lambda \beta -2\gamma \left(\gamma +t\beta \right)}$. His optimal profits in a VN power structure and in a RS power structure are ${\pi}_{m}^{r}\left({w}_{n}^{r}\right)=\frac{4{\lambda}^{2}\beta {\left(\alpha -\beta c\right)}^{2}}{{[6\lambda \beta -\gamma \left(\gamma +t\beta \right)]}^{2}}$ and ${\pi}_{m}^{r}\left({w}_{r}^{r}\right)=\frac{4{\lambda}^{2}\beta {\left(\alpha -\beta c\right)}^{2}}{{[8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}}$, respectively. We have ${\pi}_{m}^{r}\left({w}_{m}^{r}\right)-{\pi}_{m}^{r}\left({w}_{n}^{r}\right)=\frac{\lambda {\left(\alpha -\beta c\right)}^{2}{[2\lambda \beta -\gamma \left(\gamma +t\beta \right)]}^{2}}{{[6\lambda \beta -\gamma \left(\gamma +t\beta \right)]}^{2}[8\lambda \beta -2\gamma \left(\gamma +t\beta \right)]}>0$, so ${\pi}_{m}^{r}\left({w}_{m}^{r}\right)>{\pi}_{m}^{r}\left({w}_{n}^{r}\right)$. Similarly, ${\pi}_{m}^{r}\left({w}_{n}^{r}\right)-{\pi}_{m}^{r}\left({w}_{r}^{r}\right)=\frac{4\beta \lambda {\left(\alpha -\beta c\right)}^{2}[2\beta \lambda -\beta t\left(\gamma +t\beta \right)][14\beta \lambda -{\left(\gamma +t\beta \right)}^{2}-\gamma \left(\gamma +t\beta \right)]}{{[6\lambda \beta -\gamma \left(\gamma +t\beta \right)]}^{2}{[8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}}>0$, so ${\pi}_{m}^{r}\left({w}_{n}^{r}\right)>{\pi}_{m}^{r}\left({w}_{r}^{r}\right)$. Then, ${\pi}_{m}^{r}\left({w}_{m}^{r}\right)>{\pi}_{m}^{r}\left({w}_{n}^{r}\right)>{\pi}_{m}^{r}\left({w}_{r}^{r}\right)$.
- From Lemma 2 and Equation (3), we have the retailer’s optimal profit in a MS power structure is ${\pi}_{r}^{r}\left({p}_{m}^{r},{e}_{m}^{r}\right)=\frac{\lambda \left(4\lambda \beta -{\gamma}^{2}\right){\left(\alpha -\beta c\right)}^{2}}{4{[4\lambda \beta -\gamma \left(\gamma +t\beta \right)]}^{2}}$. Her optimal profits in a VN power structure and in a RS structure are ${\pi}_{r}^{r}\left({p}_{n}^{r},{e}_{n}^{r}\right)=\frac{\lambda \left(4\lambda \beta -{\gamma}^{2}\right){\left(\alpha -\beta c\right)}^{2}}{{[6\lambda \beta -\gamma \left(\gamma +t\beta \right)]}^{2}}$ and ${\pi}_{r}^{r}\left({p}_{r}^{r},{e}_{r}^{r}\right)=\frac{\lambda {\left(\alpha -\beta c\right)}^{2}}{8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}}$, respectively. We have ${\pi}_{r}^{r}\left({p}_{n}^{r},{e}_{n}^{r}\right)-{\pi}_{r}^{r}\left({p}_{m}^{r},{e}_{m}^{r}\right)=\frac{\lambda {\left(\alpha -\beta c\right)}^{2}\left(4\lambda \beta -{\gamma}^{2}\right)[14\beta \lambda -3\gamma \left(\gamma +t\beta \right)][2\beta \lambda -\gamma \left(\gamma +t\beta \right)]}{{[6\lambda \beta -\gamma \left(\gamma +t\beta \right)]}^{2}{[8\lambda \beta -2\gamma \left(\gamma +t\beta \right)]}^{2}}>0$, so ${\pi}_{r}^{r}\left({p}_{n}^{r},{e}_{n}^{r}\right)>{\pi}_{r}^{r}\left({p}_{m}^{r},{e}_{m}^{r}\right)$. Similarly, ${\pi}_{r}^{r}\left({p}_{r}^{r},{e}_{r}^{r}\right)-{\pi}_{r}^{r}\left({p}_{n}^{r},{e}_{n}^{r}\right)=\frac{4\beta {\lambda}^{2}{\left(\alpha -\beta c\right)}^{2}\left(\beta \lambda +6{\gamma}^{2}+{\beta}^{2}{t}^{2}-\beta \gamma t\right)}{{[6\lambda \beta -\gamma \left(\gamma +t\beta \right)]}^{2}{[8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}}>0$, so ${\pi}_{r}^{r}\left({p}_{r}^{r},{e}_{r}^{r}\right)>{\pi}_{r}^{r}\left({p}_{n}^{r},{e}_{n}^{r}\right)$. Then, ${\pi}_{r}^{r}\left({p}_{r}^{r},{e}_{r}^{r}\right)>{\pi}_{r}^{r}\left({p}_{n}^{r},{e}_{n}^{r}\right)>{\pi}_{r}^{r}\left({p}_{m}^{r},{e}_{m}^{r}\right)$.This completes the proof.

**Proof of Lemma**

**3.**

**Proof of Proposition**

**3.**

**Proof of Proposition**

**4.**

## References

- Chen, H.; Burns, D.L. Environmental analysis of textile products. Cloth. Text. Res. J.
**2006**, 24, 248–261. [Google Scholar] [CrossRef] - Battaglia, M.; Testa, F.; Bianchi, L.; Iraldo, F.; Frey, M. Corporate social responsibility and competitiveness within SMEs of the fashion industry: Evidence from Italy and France. Sustainability
**2014**, 6, 872–893. [Google Scholar] [CrossRef] - Krass, D.; Nedorezov, T.; Ovchinnikov, A. Environmental taxes and the choice of green technology. Prod. Oper. Manag.
**2013**, 22, 1035–1055. [Google Scholar] [CrossRef] - Atasu, A.; Özdemir, Ö.; Van Wassenhove, L.N. Stakeholder Perspectives under EWaste Take-Back Legislation. Prod. Oper. Manag.
**2013**, 22, 382–396. [Google Scholar] [CrossRef] - Drake, D.F.; Kleindorfer, P.R.; Van Wassenhove, L.N. Technology choice and capacity portfolios under emissions regulation. Prod. Oper. Manag.
**2015**, 25, 1006–1025. [Google Scholar] [CrossRef] - Swami, S.; Shah, J. Channel coordination in green supply chain management. J. Oper. Res. Soc.
**2013**, 64, 336–351. [Google Scholar] [CrossRef] - Shen, B. Sustainable Fashion Supply Chain: Lessons from H&M. Sustainability
**2014**, 6, 6236–6249. [Google Scholar] - Tang, J.; Ji, S.; Jiang, L. The design of a sustainable location-routing-inventory model considering consumer environmental behavior. Sustainability
**2016**, 8, 211. [Google Scholar] [CrossRef] - Dong, C.; Shen, B.; Chow, P.S.; Yang, L.; Ng, C.T. Sustainability investment under cap-and-trade regulation. Ann. Oper. Res.
**2016**, 240, 509–531. [Google Scholar] [CrossRef] - Li, Q.; Shen, B. Sustainable Design Operations in the Supply Chain: Non-Profit Manufacturer vs. For-Profit Manufacturer. Sustainability
**2016**, 8, 639. [Google Scholar] [CrossRef] - H&M Group Sustainability Report 2017. Available online: http://sustainability.hm.com/content/dam/hm/about/documents/en/CSR/Report%202016/HM_group_SustainabilityReport_2016_FullReport_en.pdf (accessed on 4 April 2017).
- Marks & Spencer Plan A Report 2016. Available online: http://planareport.marksandspencer.com/M&S_PlanA_Report_2016.pdf (accessed on 15 June 2016).
- Chen, X.; Wang, X.; Chan, H.K. Manufacturer and retailer coordination for environmental and economic competitiveness: A power perspective. Trans. Res. Part E Logist. Trans. Rev.
**2017**, 97, 268–281. [Google Scholar] [CrossRef] - Benjaafar, S.; Li, Y.; Daskin, M. Carbon footprint and the management of supply chains: Insights from simple models. IEEE Trans. Autom. Sci. Eng.
**2013**, 10, 99–116. [Google Scholar] [CrossRef] - Choi, T.M. Local sourcing and fashion quick response system: The impacts of carbon footprint tax. Trans. Res. Part E Logist. Trans. Rev.
**2013**, 55, 43–54. [Google Scholar] [CrossRef] - Drake, D.; Spinler, S. Sustainable operations management: An enduring stream or a passing fancy? Manuf. Ser. Oper. Manag.
**2013**, 15, 689–700. [Google Scholar] [CrossRef] - Letmathe, P.; Balakrishnan, N. Environmental considerations on the optimal product mix. Eur. J. Oper. Res.
**2005**, 167, 398–412. [Google Scholar] [CrossRef] - Dobos, I. The effects of emission trading on production and inventories in the Arrow–Karlin model. Int. J. Prod. Econ.
**2005**, 93, 301–308. [Google Scholar] [CrossRef] - Bouchery, Y.; Ghaffari, A.; Jemai, Z.; Dallery, Y. Including sustainability criteria into inventory models. Eur. J. Oper. Res.
**2012**, 222, 229–240. [Google Scholar] [CrossRef] - Zhang, B.; Xu, L. Multi-item production planning with carbon cap and trade mechanism. Int. J. Prod. Econ.
**2013**, 144, 118–127. [Google Scholar] [CrossRef] - Nouira, I.; Frein, Y.; Hadj-Alouane, A.B. Optimization of manufacturing systems under environmental considerations for a greenness-dependent demand. Int. J. Prod. Econ.
**2014**, 150, 188–198. [Google Scholar] [CrossRef] - Toptal, A.; Özlü, H.; Konur, D. Joint decisions on inventory replenishment and emission reduction investment under different emission regulations. Int. J. Prod. Res.
**2014**, 52, 243–269. [Google Scholar] [CrossRef] - Rosič, H.; Jammernegg, W. The economic and environmental performance of dual sourcing: A newsvendor approach. Int. J. Prod. Econ.
**2013**, 143, 109–119. [Google Scholar] [CrossRef] - Yalabik, B.; Fairchild, R.J. Customer, regulatory, and competitive pressure as drivers of environmental innovation. Int. J. Prod. Econ.
**2011**, 131, 519–527. [Google Scholar] [CrossRef] - Liu, Z.L.; Anderson, T.D.; Cruz, J.M. Consumer environmental awareness and competition in two-stage supply chains. Eur. J. Oper. Res.
**2012**, 218, 602–613. [Google Scholar] [CrossRef] - Chen, X.; Hao, G. Sustainable pricing and production policies for two competing firms with carbon emissions tax. Int. J. Prod. Res.
**2015**, 53, 6408–6420. [Google Scholar] [CrossRef] - Jaber, M.Y.; Glock, C.H.; El Saadany, A.M. Supply chain coordination with emissions reduction incentives. Int. J. Prod. Res.
**2013**, 51, 69–82. [Google Scholar] [CrossRef] - Zhang, L.; Wang, J.; You, J. Consumer environmental awareness and channel coordination with two substitutable products. Eur. J. Oper. Res.
**2015**, 241, 63–73. [Google Scholar] [CrossRef] - Du, S.; Zhu, J.; Jiao, H.; Ye, W. Game-theoretical analysis for supply chain with consumer preference to low carbon. Int. J. Prod. Res.
**2015**, 53, 3753–3768. [Google Scholar] [CrossRef] - Shi, R.; Zhang, J.; Ru, J. Impacts of power structure on supply chains with uncertain demand. Prod. Oper. Manag.
**2013**, 22, 1232–1249. [Google Scholar] [CrossRef] - Anupindi, R.; Bassok, Y. Centralization of stocks: Retailers vs. manufacturer. Manag. Sci.
**1999**, 45, 178–191. [Google Scholar] [CrossRef] - Lariviere, M.A.; Porteus, E.L. Selling to the newsvendor: An analysis of price-only contracts. Manuf. Ser. Oper. Manag.
**2001**, 3, 293–305. [Google Scholar] [CrossRef] - Dong, L.; Rudi, N. Who benefits from transshipment? Exogenous vs. endogenous wholesale prices. Manag. Sci.
**2004**, 50, 645–657. [Google Scholar] [CrossRef] - Taylor, T.A. Sale timing in a supply chain: When to sell to the retailer. Manuf. Ser. Oper. Manag.
**2006**, 8, 23–42. [Google Scholar] [CrossRef] - Iyer, G.; Villas-Boas, J.M. A bargaining theory of distribution channels. J. Market. Res.
**2003**, 40, 80–100. [Google Scholar] [CrossRef] - Inderst, R.; Wey, C. Buyer power and supplier incentives. Eur. Econ. Rev.
**2007**, 51, 647–667. [Google Scholar] [CrossRef] - Dukes, A.J.; Geylani, T.; Srinivasan, K. Strategic assortment reduction by a dominant retailer. Market. Sci.
**2009**, 28, 309–319. [Google Scholar] [CrossRef] - Geylani, T.; Dukes, A.J.; Srinivasan, K. Strategic manufacturer response to a dominant retailer. Market. Sci.
**2007**, 26, 164–178. [Google Scholar] [CrossRef] - Raju, J.; Zhang, Z.J. Channel coordination in the presence of a dominant retailer. Market. Sci.
**2005**, 24, 254–262. [Google Scholar] [CrossRef] - Wang, Y.Y.; Sun, J.; Wang, J.C. Equilibrium markup pricing strategies for the dominant retailers under supply chain to chain competition. Int. J. Prod. Res.
**2016**, 54, 2075–2092. [Google Scholar] [CrossRef] - Choi, S.C. Price competition in a channel structure with a common retailer. Market. Sci.
**1991**, 10, 271–296. [Google Scholar] [CrossRef] - Ertek, G.; Griffin, P.M. Supplier-and buyer-driven channels in a two-stage supply chain. IIE Trans.
**2002**, 34, 691–700. [Google Scholar] [CrossRef] - Majumder, P.; Srinivasan, A. Leader location, cooperation, and coordination in serial supply chains. Prod. Oper. Manag.
**2006**, 15, 22. [Google Scholar] - Nagarajan, M.; Sošić, G. Coalition stability in assembly models. Oper. Res.
**2009**, 57, 131–145. [Google Scholar] [CrossRef] - Xue, W.; Demirag, O.C.; Niu, B. Supply chain performance and consumer surplus under alternative structures of channel dominance. Eur. J. Oper. Res.
**2014**, 239, 130–145. [Google Scholar] [CrossRef] - Chen, X.; Wang, X. Free or bundled: Channel selection decisions under different power structures. Omega
**2015**, 53, 11–20. [Google Scholar] [CrossRef] - Chen, X.; Wang, X.; Jiang, X. The impact of power structure on the retail service supply chain with an O2O mixed channel. J. Oper. Res. Soc.
**2016**, 67, 294–301. [Google Scholar] [CrossRef] - Chen, L.; Peng, J.; Liu, Z.; Zhao, R. Pricing and effort decisions for a supply chain with uncertain information. Int. J. Prod. Res.
**2017**, 55, 264–284. [Google Scholar] [CrossRef] - Zheng, B.; Yang, C.; Yang, J.; Zhang, M. Dual-channel closed loop supply chains: Forward channel competition, power structures and coordination. Int. J. Prod. Res.
**2017**, 1–18. [Google Scholar] [CrossRef] - Savaskan, R.C.; Van Wassenhove, L.N. Reverse channel design: The case of competing retailers. Manag. Sci.
**2006**, 52, 1–14. [Google Scholar] [CrossRef] - Li, Y.; Xu, L.; Li, D. Examining relationships between the return policy, product quality, and pricing strategy in online direct selling. Int. J. Prod. Econ.
**2013**, 132, 178–185. [Google Scholar] [CrossRef]

Papers | Sustainability Issues | Power Structure | |||
---|---|---|---|---|---|

Carbon Emission | Sustainable Investment Decision | Consumer Environment Awareness | |||

Manufacturer Investment Decision | Retailer Investment Decision | ||||

Choi [15], Drake and Spinler [16], Dobos [18], Bouchery et al. [19], Rosič and Jammernegg [23], Chen and Hao [26], Jaber et al. [27] | ✓ | ||||

Benjaafar et al. [14], Letmathe and Balakrishnan [17], Zhang and Xu [20] | ✓ | ✓ | |||

Toptal et al. [22] | ✓ | ✓ | |||

Zhang et al. [28] | ✓ | ✓ | |||

Dong et al. [9], Li and Shen [10], Nouira et al. [21], Yalabik and Fairchild [24], Liu et al. [25], Du et al. [29] | ✓ | ✓ | ✓ | ||

Shi et al. [30], Choi [41], Ertek and Griffin [42], Majumder and Srinivasan [43], Nagarajan and Sošić [44], Xue et al. [45], Chen and Wang [46], Chen et al. [47], Chen et al. [48], Zheng et al. [49] | ✓ | ||||

Chen et al. [13] | ✓ | ✓ | ✓ | ✓ | |

This paper | ✓ | ✓ | ✓ | ✓ | ✓ |

Model | ${\mathit{p}}_{\mathit{i}}^{\mathit{m}}$ | ${\mathit{e}}_{\mathit{i}}^{\mathit{m}}$ | ${\mathit{w}}_{\mathit{i}}^{\mathit{m}}$ |
---|---|---|---|

MS Model ($i=m$) | $c+\frac{\left(6\lambda -\beta {t}^{2}-t\gamma \right)\left(\alpha -\beta c\right)}{8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}}$ | $\frac{\left(\gamma +t\beta \right)\left(\alpha -\beta c\right)}{8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}}$ | $c+\frac{\left(4\lambda -\beta {t}^{2}-t\gamma \right)\left(\alpha -\beta c\right)}{8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}}$ |

VN Model ($i=n$) | $c+\frac{\left(4\lambda -\beta {t}^{2}-t\gamma \right)\left(\alpha -\beta c\right)}{6\lambda \beta -{\left(\gamma +t\beta \right)}^{2}}$ | $\frac{\left(\gamma +t\beta \right)\left(\alpha -\beta c\right)}{6\lambda \beta -{\left(\gamma +t\beta \right)}^{2}}$ | $c+\frac{\left(2\lambda -\beta {t}^{2}-t\gamma \right)\left(\alpha -\beta c\right)}{6\lambda \beta -{\left(\gamma +t\beta \right)}^{2}}$ |

RS Model ($i=r$) | $c+\frac{\left(6\lambda \beta -\left(2\beta t+\gamma \right)\left(\beta t+\gamma \right)\right)\left(\alpha -\beta c\right)}{2\beta \left(4\lambda \beta -{\left(\gamma +t\beta \right)}^{2}\right)}$ | $\frac{\left(\gamma +t\beta \right)\left(\alpha -\beta c\right)}{8\lambda \beta -2{\left(\gamma +t\beta \right)}^{2}}$ | $c+\frac{\left(2\lambda -\beta {t}^{2}-t\gamma \right)\left(\alpha -\beta c\right)}{8\lambda \beta -2{\left(\gamma +t\beta \right)}^{2}}$ |

Model | ${\mathsf{\Pi}}_{\mathbf{r}}^{\mathbf{m}}$ | ${\mathsf{\Pi}}_{\mathbf{m}}^{\mathbf{m}}$ |
---|---|---|

MS Model ($i=m$) | $\frac{4{\lambda}^{2}\beta {\left(\alpha -\beta c\right)}^{2}}{{[8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}}$ | $\frac{\lambda {\left(\alpha -\beta c\right)}^{2}}{8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}}$ |

VN Model ($i=n$) | $\frac{4{\lambda}^{2}\beta {\left(\alpha -\beta c\right)}^{2}}{{[6\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}}$ | $\frac{[4{\lambda}^{2}\beta -\lambda {\left(\gamma +t\beta \right)}^{2}]{\left(\alpha -\beta c\right)}^{2}}{{[6\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}}$ |

RS Model ($i=r$) | $\frac{\lambda {\left(\alpha -\beta c\right)}^{2}}{8\lambda \beta -2{\left(\gamma +t\beta \right)}^{2}}$ | $\frac{\lambda {\left(\alpha -\beta c\right)}^{2}}{4[4\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}$ |

Model | ${\mathit{p}}_{\mathit{i}}^{\mathit{r}}$ | ${\mathit{e}}_{\mathit{i}}^{\mathit{r}}$ | ${\mathit{w}}_{\mathit{i}}^{\mathit{r}}$ |
---|---|---|---|

MS Model ($i=m$) | $c+\frac{(6\lambda \beta -\gamma \left(\gamma +2\beta t\right)\left(\alpha -\beta c\right)}{2\beta \left(4\lambda \beta -\gamma \left(\gamma +t\beta \right)\right)}$ | $\frac{\gamma \left(\alpha -\beta c\right)}{2\left(4\lambda \beta -\gamma \left(\gamma +t\beta \right)\right)}$ | $c+\frac{(4\lambda \beta -\gamma \left(\gamma +2\beta t\right)\left(\alpha -\beta c\right)}{2\beta \left(4\lambda \beta -\gamma \left(\gamma +t\beta \right)\right)}$ |

VN Model ($i=n$) | $c+\frac{\left(4\lambda -t\gamma \right)\left(\alpha -\beta c\right)}{6\lambda \beta -\gamma \left(\gamma +t\beta \right)}$ | $\frac{\gamma \left(\alpha -\beta c\right)}{6\lambda \beta -\gamma \left(\gamma +t\beta \right)}$ | $c+\frac{\left(2\lambda -t\gamma \right)\left(\alpha -\beta c\right)}{6\lambda \beta -\gamma \left(\gamma +t\beta \right)}$ |

RS Model ($i=r$) | $c+\frac{\left(6\lambda -\beta {t}^{2}-t\gamma \right)\left(\alpha -\beta c\right)}{8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}}$ | $\frac{\left(\gamma +t\beta \right)\left(\alpha -\beta c\right)}{8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}}$ | $c+\frac{\left(2\lambda -\beta {t}^{2}-t\gamma \right)\left(\alpha -\beta c\right)}{8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}}$ |

Model | ${\mathit{\Pi}}_{\mathit{r}}^{\mathit{r}}$ | ${\mathit{\Pi}}_{\mathit{m}}^{\mathit{r}}$ |
---|---|---|

MS Model ($i=m$) | $\frac{\lambda \left(4\lambda \beta -{\gamma}^{2}\right){\left(\alpha -\beta c\right)}^{2}}{4{[4\lambda \beta -\gamma \left(\gamma +t\beta \right)]}^{2}}$ | $\frac{\lambda {\left(\alpha -\beta c\right)}^{2}}{2\left(4\lambda \beta -\gamma \left(\gamma +t\beta \right)\right)}$ |

VN Model ($i=n$) | $\frac{\lambda \left(4\lambda \beta -{\gamma}^{2}\right){\left(\alpha -\beta c\right)}^{2}}{{[6\lambda \beta -\gamma \left(\gamma +t\beta \right)]}^{2}}$ | $\frac{4{\lambda}^{2}\beta {\left(\alpha -\beta c\right)}^{2}}{{[6\lambda \beta -\gamma \left(\gamma +t\beta \right)]}^{2}}$ |

RS Model ($i=r$) | $\frac{\lambda {\left(\alpha -\beta c\right)}^{2}}{8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}}$ | $\frac{4{\lambda}^{2}\beta {\left(\alpha -\beta c\right)}^{2}}{{[8\lambda \beta -{\left(\gamma +t\beta \right)}^{2}]}^{2}}$ |

Model | ${\mathit{p}}_{\mathit{i}}^{0}$ | ${\mathit{w}}_{\mathit{i}}^{0}$ | ${\mathit{\pi}}_{\mathit{r}}^{0}\left({\mathit{p}}_{\mathit{i}}^{0}\right)$ | ${\mathit{\pi}}_{\mathit{m}}^{0}\left({\mathit{w}}_{\mathit{i}}^{0}\right)$ |
---|---|---|---|---|

MS Model ($i=m$) | $c+\frac{3\left(\alpha -\beta c\right)}{4\beta}$ | $c+\frac{\alpha -\beta c}{2\beta}$ | $\frac{{\left(\alpha -\beta c\right)}^{2}}{16\beta}$ | $\frac{{\left(\alpha -\beta c\right)}^{2}}{8\beta}$ |

VN Model ($i=n$) | $c+\frac{2\left(\alpha -\beta c\right)}{3\beta}$ | $c+\frac{\alpha -\beta c}{3\beta}$ | $\frac{{\left(\alpha -\beta c\right)}^{2}}{9\beta}$ | $\frac{{\left(\alpha -\beta c\right)}^{2}}{9\beta}$ |

RS Model ($i=r$) | $c+\frac{3\left(\alpha -\beta c\right)}{4\beta}$ | $c+\frac{\alpha -\beta c}{4\beta}$ | $\frac{{\left(\alpha -\beta c\right)}^{2}}{8\beta}$ | $\frac{{\left(\alpha -\beta c\right)}^{2}}{16\beta}$ |

© 2017 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).

## Share and Cite

**MDPI and ACS Style**

Shi, X.; Qian, Y.; Dong, C. Economic and Environmental Performance of Fashion Supply Chain: The Joint Effect of Power Structure and Sustainable Investment. *Sustainability* **2017**, *9*, 961.
https://doi.org/10.3390/su9060961

**AMA Style**

Shi X, Qian Y, Dong C. Economic and Environmental Performance of Fashion Supply Chain: The Joint Effect of Power Structure and Sustainable Investment. *Sustainability*. 2017; 9(6):961.
https://doi.org/10.3390/su9060961

**Chicago/Turabian Style**

Shi, Xiutian, Yuan Qian, and Ciwei Dong. 2017. "Economic and Environmental Performance of Fashion Supply Chain: The Joint Effect of Power Structure and Sustainable Investment" *Sustainability* 9, no. 6: 961.
https://doi.org/10.3390/su9060961