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

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 capac...

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Veröffentlicht in:Sustainability 2019-10, Vol.11 (20), p.5734
Hauptverfasser: Chang, Shan, Hu, Bin, He, Xiuhong
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Hu, Bin
He, Xiuhong
description 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.
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source Elektronische Zeitschriftenbibliothek - Frei zugängliche E-Journals; MDPI - Multidisciplinary Digital Publishing Institute
subjects Clean technology
Cloud computing
Consumers
Consumption
Coordination
Decision making
Environmental awareness
Environmental protection
Green marketing
Green products
Literature reviews
Manufacturers
Manufacturing
Marketing
Motivation
Production capacity
Retail stores
Revenue
Supply chains
Sustainability
Thermal expansion
title Supply Chain Coordination in the Context of Green Marketing Efforts and Capacity Expansion
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