Decision analysis of supply chain considering yield uncertainty and CSR under different market power structures

• Published in: Journal of cleaner production Vol. 434; p. 139006
• Main Authors: Chen, Nan, Cai, Jianfeng, Govindan, Kannan
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.01.2024
• Subjects: corporate social responsibility; Corporate social responsibility (CSR); decision making; decision support systems; Green supply chain (GSC); income; market power; Market power structure; markets; Nash-revenue-sharing contract; supply chain; sustainable technology; technology; uncertainty; Yield uncertainty; Yield uncertainty; Nash-revenue-sharing contract; Green supply chain (GSC); Corporate social responsibility (CSR); Market power structure
• ISSN: 0959-6526
• DOI: 10.1016/j.jclepro.2023.139006

Environmental issues drive the manufacturer to strive for green technology innovation. The manufacturer cannot strictly control all the activities in the production process, which may cause yield uncertainty. However, the existing studies that consider uncertainty factors usually assume that yield is deterministic. This paper constructs a green supply chain considering yield uncertainty and corporate social responsibility by a manufacturer and a retailer under different market power structures. We examine that yield uncertainty negatively affects the optimal decision-making strategies under four different power structures, especially in the centralized model. The retailer who adopts corporate social responsibility can alleviate the negative effects of yield uncertainty to a certain extent. Meanwhile, it is interesting that the manufacturer is not maximizing profits in the market dominated by himself and is subject to interference from yield uncertainty and corporate social responsibility. When the yield uncertainty is relatively small, the manufacturer's profit is the largest in the retailer-dominated market structure. However, when the yield uncertainty is significant, the revenue for the manufacturer is the largest in the manufacturer-dominated market. Regardless of how the yield uncertainty changes, the retailer's profit is always the largest in the retailer-led model. To alleviate the manufacturer's green costs, the retailer will share part of their revenue with the manufacturer under the Nash model. The Nash-revenue-sharing contract always benefits the manufacturer but hurts the profits of the retailer with a higher sharing coefficient. Finally, this paper provides prominent implications for managers and governments.