Supply Chain Coordination in the Context of Green Marketing Efforts and Capacity Expansion

Abstract

This paper focuses on coordination issues related to the green supply chain with capacity constraints and green marketing efforts. We build a two-stage green supply chain, in which the upstream manufacturer has a certain amount of installed capacity to produce green product, yet can expand its capacity through a Cloud Manufacturing (CM) Platform once its existing capacity becomes insufficient, while the downstream retailer expends green marketing effort to promote the green product. In particular, we analyze the interaction between the capacity expansion options of the manufacturer and the green marketing efforts of the retailer. Aiming to mitigate the inefficiency under a decentralized green supply chain, we design a contract that combines cost-sharing and revenue-sharing in green marketing in order to coordinate the supply chain. The results show that:(1) when the manufacturer's existing capacity falls below a certain threshold, it will choose to expand its capacity. The threshold is related to existing capacity, capacity expansion cost coefficient, green marketing cost coefficient, and sensitivity coefficient of demand to green marketing. (2) Under low capacity, if the capacity expansion cost coefficient is large, a higher consumer environmental awareness or preference for green products will weaken the retailer's motivation for expending green effort. (3) A contract for cost-sharing and revenue-sharing in green marketing can fully coordinate the green supply chain, whereby the two share proportions are equal and meet certain constraints.

Optimal Financing Strategy in a Capital-Constrained Supply Chain with Retailer Green Marketing Efforts

“…Different SC participants can implement different sustainable development strategies. For example, manufacturers can produce green products by reducing carbon emissions and green innovation, while retailers can implement environmental protection through green marketing efforts such as advertising and promotion [16]. As a common way to encourage sustainable behaviors, green marketing has been included in the theory of SC sustainable development [40].…”

“…Some studies focused on GSCM under the capital constraint without considering green marketing efforts [5,48,52,53]. Meanwhile, some other studies discussed green marketing efforts without paying attention to retailers' capital constraints [9,16]. This paper's research contents are compared with the existing research results, as shown in Table 1.…”

The Impact of Equity Financing on the Performance of Capital-Constrained Supply Chain under Consumers’ Low-Carbon Preference

“…In this paper, we first constructed Stackelberg game models for a low-carbon supply chain, which consists of one manufacturer (leader) and one capital-constrained retailer(follower), similar to the application of this model in previous studies [ 37 , 38 , 39 , 40 ]. Currently, the manufacturer is adopting innovative and environmentally friendly technologies to produce low-carbon products to reduce carbon emissions, the retailer is ordering low-carbon products and promoting them in the market, and consumers are becoming more environmentally aware and they prefer low-carbon products.…”

“…Assuming that market demand is a linear function of the retail price of the products (p) and the level of carbon emission reduction efforts (e), and the retailer’s order quantity is equal to the actual demand of the market. Similar to the assumptions for demand function in previous studies [ 3 , 6 , 36 , 40 ], the market demand function can be given as: …”

Coordinating a Green Agri-Food Supply Chain with Revenue-Sharing Contracts Considering Retailers’ Green Marketing Efforts

“…Although, effective green marketing can be used to educate consumers, help them understand the nature of green agri-food, and cultivate consumers' awareness of green consumption. Therefore, considering the retailer's green marketing effort is very important to help consumers form a more complete environmental awareness and promote the demand for green agri-food [49], and also makes the research results more relevant to the actual situation.…”