A Stackelberg Game Approach in an Integrated Inventory Model with Carbon-Emission and Setup Cost Reduction

Abstract

This paper formulates an integrated inventory model that allows Stackelberg game policy for optimizing joint total cost of a vendor and buyer system. After receiving the lot, the buyer commences an inspection process to determine the defective items. All defective items the buyer sends to vendor during the receiving of the next lot. Due to increasing number of shipments fixed and variable transportation, as well as carbon emissions, are considered, which makes the model sustainable integrated model forever. To reduce the setup cost for the vendor, a discrete setup reduction is considered for maximization more profit. The players of the integrated model are with unequal power (as leader and follower) and the Stackelberg game strategy is utilized to solve this model for obtaining global optimum solution over the finite planning horizon. An illustrative numerical example is given to understand this model clearly.

Low Carbon Supply Chain Coordination for Imperfect Quality Deteriorating Items

“…In the first case, the buyer performs the quality inspection, and in the second case, the quality inspection becomes the vendor's responsibility. The first model extends the studies of Wahab et al [10], Jauhari et al [11], Sarkar et al [12], Jauhari [13], and Gautam and Khanna [14] to consider the effect of deterioration. In addition to the fixed and variable inspection costs, the model also extends Tiwari et al's [15] model by introducing weight and distance-dependent transportation cost and emission variables.…”

“…Recently, Sarkar et al [7,8] and Daryanto and Wee [9] incorporated a carbon tax in a supply chain total cost model. Wahab et al [10], Jauhari et al [11], Sarkar et al [12], Jauhari [13], Gautam and Khanna [14], and Tiwari et al [15] incorporated both carbon emissions and imperfect quality in a low-carbon supply chain model. The quality inspection is performed by the buyer, and the defective products are sent back to the vendor or sold into the secondary market at a discounted price.…”

Sustainability Analysis of Supply Chains with Fashion Products under Alternative Power Structures and Loss-Averse Supplier

“…Reference [1] analyze the effects of the cost of carbon emission, unequal lot sizes, and setup cost on the supply chain's decisions. Reference [2] further investigate how to reduce the setup cost in an integrated supply chain with carbon emission. In a recent work, a three-tier supply chain with carbon emission is studied with the consideration of variable transportation [3].…”

“…This induces many industries to control carbon emission [1][2][3]. Among all industries, the fashion and apparel industry raises most concerns due to lots of related issues: the overuse of energy and water, the toxic dye, the waste of raw materials, etc.…”

“…This helps them "reduce the side effects to the environment and project a positive brand image" [5]. Admittedly, sustainable fashion induces the fashion companies to concern more about sustainability-oriented objectives, however, they are also aware of that intracompany effort is limited [1,2,6] and insufficient and attempting to exert more intercompany effort in the supply chain level. In a recent survey conducted by the United States Fashion Industry Association, 33% respondents rate "unmet social and environmental compliance" as having a high impact on their supply chains, which is much higher than concerns for other supply chain risks (United States Fashion Industry Association [7].…”