Game theory analysis of green procurement in sustainable supply chain management

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Game theory analysis of green procurement in sustainable supply chain management

 

Author: Ma, Xin
Title: Game theory analysis of green procurement in sustainable supply chain management
Degree: Ph.D.
Year: 2016
Subject: Industrial procurement -- Environmental aspects.
Business logistics -- Environmental aspects.
Greenhouse gas mitigation.
Hong Kong Polytechnic University -- Dissertations
Department: Dept. of Industrial and Systems Engineering
Pages: xi, 163 pages : color illustrations
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b2931181
URI: http://theses.lib.polyu.edu.hk/handle/200/8806
Abstract: With the rapid increase of fossil energy consumption, climate change and environmental problems are receiving closer attention. Starting from the perspective of sustainable supply chain management, besides procurement costs, a manufacturer (or a buyer) has to pay great attention to the cost of emitting greenhouse gases, which is directly influenced by the green degree of the raw materials from its suppliers. Therefore, there exists a conflict in a supply chain. That is, suppliers pass on the greenhouse gas emissions to the manufacturer to avoid the environmental cost. To study the coordination behaviors in a supply chain from sustainable perspective, this research focuses on how a manufacturer can adopt reasonable procurement strategies under the carbon emission regulations to achieve simultaneously the goals of profit maximization and pollution minimization. Three specific topics on green procurement are studied.
In the first topic, the competition between two independent manufacturers is analyzed under two types of carbon emission regulations. Several boundary conditions are derived to assist the manufacturer to make the optimal procurement decision. In addition, how to select appropriate locations for the manufacturer to set up factories are analyzed by comparison of the influences of carbon emission regulations. With respect to the asymmetric information of suppliers, the second topic firstly focuses on the procurement contract design issue between a manufacturer and a single supplier. The green degree of a supplier is private and known only by the supplier itself. This factor predominately determines the emission volumes of the manufacturer. Under the emissions trading mechanism, the procurement contract between the profit-maximization manufacturer and the supplier is analyzed under different types of auctions, and a scenario of competitive procurement with multiple suppliers is discussed. From the dynamic viewpoint, the third topic aims to analyze the impact of carbon tax schemes on the pricing issue in a decentralized supply chain with a profit-maximization manufacturer and multiple suppliers. Two types of pricing strategies are derived respectively for both suppliers and the manufacturer. In addition, to observe a more general outcome, the scenario for the manufacturer sourcing from an n-suppliers' oligopoly is studied. The comparative statics analysis is conducted for the pricing strategies under different situations and parameter settings. Regarding each specific model, research outcomes provide meaningful managerial implications for both manufacturers and suppliers. Manufacturers benefit from the findings by adopting flexible strategies (e.g., ordering strategy, contract design, pricing strategy) when they comply with different carbon emissions regulations. The suppliers can have a better understanding of methods for maintaining or increasing their market share and the mutual effects of the strategies on the manufacturer and suppliers.

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