Optimization and Coordination of a Sustainable Supply Chain with Emission Reduction Considerations

Low-Carbon supply chains have gained many attentions from academia, practitioners, governments and nongovernmental organizations. Along with that, the growing awareness of market about the carbon footprint of the produces that it consumes have led to the joint problem of sustainable supply chain coordination and emission abatement. Here a two-echelon supply chain, consisting a single retailer and a single manufacturer has been investigated in a Stackelberg game setting where the manufacturer is the channel leader. Implementing the consumer's green consumption preference and carbon abatement level into the demand function, a revenue sharing contract in been conducted to solve the channel conflict and double marginalization effect. The analytical results and numerical example prove the profit improvement of both channel members and validates the effectiveness and environmental-friendliness of the constructed settings.