Pricing and Coordinating the Lease-Oriented Closed-Loop Supply Chain for Construction Machinery in the Era of Carbon Tax

• Published in: Buildings (Basel) Vol. 13; no. 9; p. 2145
• Main Authors: Yin, Jing, Fang, Yifan, Zhang, Hengxi, Wang, Tingting, Cai, Shunyao
• Format: Journal Article
• Language: English
• Published: Basel MDPI AG 01.09.2023
• Subjects: Air quality management; Carbon; carbon tax policy; Carbon taxes; China; Closed loops; Coefficients; Compensation; Construction; Construction equipment; Construction equipment industry; Construction industry; construction machinery; Consumer behavior; Consumer preferences; Consumers; Contract manufacturing; Cost control; Decision making; Economics; Emissions; Emissions (Pollution); Emissions trading; Energy conservation; Energy consumption; Energy efficiency; Environmental tax; Fiscal policy; Inventory; Inventory management; lease-oriented closed-loop supply chain; Leases; Leasing; Machinery; Machinery industry; Magneto-electric machines; Manufacturers; Mathematical models; Optimization; Parameter sensitivity; Prices; Pricing; Profitability; Profits; Recycling (Waste, etc.); Remanufacturing; Revenue sharing; Sensitivity analysis; Simulation methods; Strategic management; Supply chains; Sustainable consumption; Sustainable development; Sustainable production; Tariffs; Tax rates; Taxation; Taxes; the combined contract; China
• ISSN: 2075-5309; 2075-5309
• DOI: 10.3390/buildings13092145

Promoting sustainable production and consumption practices in the construction machinery industry is crucial for achieving energy savings and reducing carbon emissions. However, there is a lack of targeted studies addressing the challenge of scaling up leasing and recycling while maximizing economic benefits for enterprises. To fill this gap, this paper presents a lease-oriented closed-loop supply chain model that incorporates a carbon tax policy to investigate the impact of the carbon tax rate and consumer preferences for remanufactured products on the supply chain and introduces a leasing compensation–cost apportioning combined contract to achieve supply chain coordination in the construction machinery sector. The model considers differential selling and leasing prices for new and remanufactured products, as well as the recovery rate, under both centralized and decentralized decision-making approaches. The study explores the interrelationships between various parameters through sensitivity analysis and numerical simulation. The results demonstrate that within a certain range of the cost apportioning proportional coefficient and leasing compensation proportional coefficient, the combined contract can lead the supply chain to achieve Pareto optimality. As the carbon tax rate increases, it was observed that the profits for all parties in the supply chain tend to decrease. However, due to the increased demand for remanufactured products, the product recovery rate improves, resulting in a reduction in total carbon emissions in the closed-loop supply chain of construction machinery. Moreover, the profits of all parties and the total supply chain profits initially decrease and then increase with an increasing preference coefficient for remanufactured products among consumers. By leveraging these factors and adopting effective strategies, such as enhancing consumer recognition of remanufactured products and optimizing pricing and cost allocation, it is indeed possible for the profits of all parties and the total profits in the supply chain to surpass the initial values, even in the face of increasing carbon tax rates. This demonstrates the potential for aligning sustainability objectives with economic benefits in the construction machinery industry.