Decision-Making for Green Supply Chain Considering Fairness Concern Based on Trade Credit

• Published in: IEEE access 2021, Vol.9, p.67684-67695
• Main Authors: Yang, Haoxiong, Shao, Enlu, Gong, Yuanyuan, Guan, Xiaolin
• Format: Article
• Language: English
• Subjects: Decision making; Economic indicators; fairness concern; Green products; Green supply chain; Interest rates; Pricing; Production; Research and development; Sales; Supply chains; trade credit
• ISSN: 2169-3536; 2169-3536
• DOI: 10.1109/ACCESS.2021.3073472

Considering the deferred and risk-free interest rates, this paper focuses on the impact of fairness concern on optimal strategies about pricing, green levels and sales effort in manufacturer-led green supply chain. The results show that in the scenario with fairness neutral, the optimal benefit under decentralized decision is always less than the centralized decision, and the risk-free interest rate is larger, the difference between the two is more obvious. While in the scenario with fairness concern, the fairness degree, product greening efficiency and the return on sales work together on the greenness, sales efforts and pricing decision of the product under the condition that the Nash-negotiation solution is used as a fair reference point. Although fairness concern behavior always achieves utility fairness by harming the other party's revenue, the overall utility of the supply chain will grow to some extent under the manufacturer's fairness-concern behavior, which is in stark contrast to the impact of retailer's fairness concern.