Emission Reduction and Channel Decisions in a Two-Echelon Supply Chain Considering Service Spillovers
Abstract
:1. Introduction
- (1)
- How do consumers’ low-carbon preferences and service sensitivity affect suppliers’ emission reduction and channel selection decisions?
- (2)
- Under a dual-channel structure, how do service spillovers affect the decision-making of supply chain members?
- (3)
- When suppliers exploit online channels to introduce competition, which decisions can retailers make to respond to showrooming?
- (4)
- What effect do carbon cap-and-trade (CCT) mechanisms and/or low-carbon policies have on the realization of a win-win outcome?
2. Literature Review
3. The Model
4. Equilibrium Solutions and Discussions in Four Scenarios
4.1. Single-Channel Structure
4.2. Dual-Channel Structure
4.2.1. No Service Spillovers
4.2.2. Service Spillover
- (i)
- ;
- (ii)
- if , otherwise ;
- (iii)
- and if , while and if .
5. Service Strategy
5.1. Channel Decision
5.2. Service Strategy
6. Extended Discussion
- (i)
- ;
- (ii)
- and if , while and , if , Where, ;
- (iii)
- , .
7. Conclusions
- (1)
- The channel decisions of the supplier primarily depend on the costs of the direct channel. The supplier prefers to encroach on the market when the cost of opening a direct channel is relatively low; otherwise, she will employ the single-channel strategy, which only distributes through the retail channel. Furthermore, a higher degree of service spillovers motivates supplier encroachment when retail services are available.
- (2)
- When consumers have both low-carbon preference and service sensitivity, the purpose of dual-channel distribution is not to eliminate the traditional channel but to increase total demand by taking advantage of service spillovers and green production. Thus, if the retailer decides to provide retail services in the dual-channel supply chain, the supplier always has the incentive to reduce emissions.
- (3)
- By comparing the optimal service strategies of the retailer in the single-channel and dual-channel supply chains, we reach three interesting conclusions. Firstly, supplier encroachment could motivate the retailer to enhance his service level and help him get more returns from providing retail services, as long as the degree of service spillover is above a threshold. Secondly, compared with service sensitivity, consumers’ low-carbon preference plays a more decisive role in the retailer’s service strategies under a dual-channel structure. Thirdly, if supplier encroachment induces intensive channel competition, although the emission reduction level of the supplier is still better than that under the single-channel structure, the retailer’s margins and service inputs will diminish. Therefore, the optimal decision of emission abatement levels and retail service levels are not positively correlated under supplier encroachment.
- (4)
- The implementation of CCT regulation is beneficial for the retailer to achieve profit growth from the supplier encroachment, which also contributes to achieving a win-win situation under the dual-channel structure.
Author Contributions
Funding
Data Availability Statement
Conflicts of Interest
Appendix A
Appendix A.1. Proof of Lemma 1
Appendix A.2. Proof of Proposition 1
Appendix A.3. Proof of Corollary 1
Appendix A.4. Proof of Lemma 2
Appendix A.5. Proof of Proposition 2
Appendix A.6. Proof of Corollary 2
Appendix A.7. Proof of Lemma 3
Appendix A.8. Proof of Proposition 3
Appendix A.9. Proof of Proposition 4
Appendix A.10. Proof of Corollary 3
Appendix A.11. Proof of Lemma 4
Appendix A.12. Proof of Proposition 5
Appendix B
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Model Parameters | |
---|---|
Potential demand of market | |
Low-carbon preference coefficient | |
Service sensitivity coefficient | |
Unit production cost (a nonnegative constant) | |
Cost coefficient of emission reduction | |
Fixed cost of the direct channel | |
The substitution degree between dual channels | |
Degree of service spillover | |
Unit retail/direct price | |
Unit carbon price | |
Initial unit amount of carbon emissions from production process | |
Total carbon quotas | |
Decision variables | |
Order/output quantity | |
Emission reduction level | |
Retail service level | |
Unit wholesale price |
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The supplier’s channel decision: encroach on the market by opening an internet channel. The retailer’s service strategy: diminish service inputs. | The supplier’s channel decision: encroach on the market by opening an internet channel. The retailer’s service strategy: raise the service level. | |
The supplier’s channel decision: distribute through the retail channel only. The retailer’s service strategy: diminish service inputs. | The supplier’s channel decision: distribute through the retail channel only. The retailer’s service strategy: raise the service level. |
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Chen, X.; Wang, J.; Xu, P.; Walker, T.; Yang, G. Emission Reduction and Channel Decisions in a Two-Echelon Supply Chain Considering Service Spillovers. Mathematics 2023, 11, 4423. https://doi.org/10.3390/math11214423
Chen X, Wang J, Xu P, Walker T, Yang G. Emission Reduction and Channel Decisions in a Two-Echelon Supply Chain Considering Service Spillovers. Mathematics. 2023; 11(21):4423. https://doi.org/10.3390/math11214423
Chicago/Turabian StyleChen, Xiaoxu, Jingwei Wang, Peng Xu, Thomas Walker, and Guoqiang Yang. 2023. "Emission Reduction and Channel Decisions in a Two-Echelon Supply Chain Considering Service Spillovers" Mathematics 11, no. 21: 4423. https://doi.org/10.3390/math11214423