Decisions and Coordination of the Green Supply Chain with Retailers’ Fairness Concerns

Abstract

The development of a green economy has become a global consensus. More and more manufacturers are greening their production to build green supply chains. At the same time, retailers are employing green marketing efforts for green products. In addition, members who are followers of the green supply chain are prone to fairness-concern behavior. To investigate the impact of fairness concerns on green supply chain decisions, this study develops a two-tier green supply chain in which the manufacturer makes green input and the retailer makes green marketing effort input. The retailer in the follower position of the supply chain has fairness concerns. Stackelberg game models are constructed and compared in three scenarios: one without fairness concerns, one where the manufacturer considers the retailer’s fairness concerns, and one where the manufacturer does not consider the retailer’s fairness concerns. After the manufacturer decides whether to consider the retailer’s fairness concerns, a two-part tariff contract is used to coordinate the green supply chain based on optimal decision-making and profit under a centralized decision-making condition. The study found that: (1) when the manufacturer considers the retailer’s fairness concerns, fairness concerns will negatively impact greenness, green marketing efforts, wholesale price, and retail price. When the manufacturer does not consider the retailer’s fairness concerns, fairness concerns will not impact greenness or wholesale price, but will negatively impact green marketing efforts; (2) the retailer’s fairness concerns have a negative impact on the green supply chain’s profit, and from the supply chain perspective, the retailer should abandon its fairness concerns; (3) it will be more beneficial if the manufacturer can consider the retailer’s fairness concerns; (4) when the manufacturer does not consider the retailer’s fairness concerns, the retailer can make fairness concerns according to the parameter conditions; (5) when a fixed fee meets a certain range, the two-part tariff contract can coordinate the green supply chain when the retailer has fairness concerns. The results will help manufacturers and retailers better understand fairness concerns and provide them with decision-making guidance and coordinated choices.

Keywords

• green supply chain
• fairness concerns
• optimal decisions
• coordination
• Stackelberg game