Green supply chain management through call option contract and revenue-sharing contract to cope with demand uncertainty
Green supply chain management (GSCM) could be applied to enhance environmental and economic goals simultaneously; nevertheless, according to The University of Chicago Booth report, the overwhelming impacts of the COVID-19 epidemic have caused high fluctuations in market demand. Hence, green supply c...
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| Format: | Article |
| Language: | English |
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Elsevier
2021-12-01
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| Series: | Cleaner Logistics and Supply Chain |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S277239092100010X |
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| author | Mohamad Dehghan-Bonari Alireza Bakhshi Amir Aghsami Fariborz Jolai |
| author_facet | Mohamad Dehghan-Bonari Alireza Bakhshi Amir Aghsami Fariborz Jolai |
| author_sort | Mohamad Dehghan-Bonari |
| collection | DOAJ |
| description | Green supply chain management (GSCM) could be applied to enhance environmental and economic goals simultaneously; nevertheless, according to The University of Chicago Booth report, the overwhelming impacts of the COVID-19 epidemic have caused high fluctuations in market demand. Hence, green supply chain (SC) managers have faced challenges in the decision-making process. Motivated by this issue, we investigate a two-echelon SC network containing one retailer and two suppliers (a non-green supplier and a green supplier). The non-green supplier produces a customary product and has a limited production capacity. Inspired by Coors Brewery Company, the green supplier produces a recyclable product with sufficient production capacity; the retailer faces demand uncertainty and is responsible for bringing back the end-of-life products to the green supplier for the recycling process. In this study, besides decentralized and centralized decision scenarios, we survey two kinds of contracts, i.e., a call option contract and a revenue-sharing contract, which the green supplier offers as risk-sharing policies to motivate the retailer to increase its order quantity. We found that the two parties could agree to coordinate the channel by negotiating the optimal terms of the recommended contracts (i.e., call option contract terms: option price and exercise price, revenue-sharing contract term: wholesale price). Furthermore, our results show that both proposed contracts create a win–win situation for each member and heighten the profitability of the entire SC. By comparing the two contracts, we notice that the green supplier would like to offer the call option contract, and the retailer desires to accept the revenue-sharing contract in return. |
| format | Article |
| id | doaj-art-7e91f757242c4200bb455c154ca1d11d |
| institution | DOAJ |
| issn | 2772-3909 |
| language | English |
| publishDate | 2021-12-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Cleaner Logistics and Supply Chain |
| spelling | doaj-art-7e91f757242c4200bb455c154ca1d11d2025-08-20T02:50:26ZengElsevierCleaner Logistics and Supply Chain2772-39092021-12-01210001010.1016/j.clscn.2021.100010Green supply chain management through call option contract and revenue-sharing contract to cope with demand uncertaintyMohamad Dehghan-Bonari0Alireza Bakhshi1Amir Aghsami2Fariborz Jolai3School of Industrial and Systems Engineering, College of Engineering, University of Tehran, P.O. Box 11155-4563, Tehran, IranSchool of Industrial and Systems Engineering, College of Engineering, University of Tehran, P.O. Box 11155-4563, Tehran, IranSchool of Industrial and Systems Engineering, College of Engineering, University of Tehran, P.O. Box 11155-4563, Tehran, Iran; School of Industrial Engineering, K. N. Toosi University of Technology (KNTU), Tehran, Iran; Corresponding author at: School of Industrial and Systems Engineering, College of Engineering, University of Tehran, P.O. Box 11155-4563, Tehran, Iran.School of Industrial and Systems Engineering, College of Engineering, University of Tehran, P.O. Box 11155-4563, Tehran, IranGreen supply chain management (GSCM) could be applied to enhance environmental and economic goals simultaneously; nevertheless, according to The University of Chicago Booth report, the overwhelming impacts of the COVID-19 epidemic have caused high fluctuations in market demand. Hence, green supply chain (SC) managers have faced challenges in the decision-making process. Motivated by this issue, we investigate a two-echelon SC network containing one retailer and two suppliers (a non-green supplier and a green supplier). The non-green supplier produces a customary product and has a limited production capacity. Inspired by Coors Brewery Company, the green supplier produces a recyclable product with sufficient production capacity; the retailer faces demand uncertainty and is responsible for bringing back the end-of-life products to the green supplier for the recycling process. In this study, besides decentralized and centralized decision scenarios, we survey two kinds of contracts, i.e., a call option contract and a revenue-sharing contract, which the green supplier offers as risk-sharing policies to motivate the retailer to increase its order quantity. We found that the two parties could agree to coordinate the channel by negotiating the optimal terms of the recommended contracts (i.e., call option contract terms: option price and exercise price, revenue-sharing contract term: wholesale price). Furthermore, our results show that both proposed contracts create a win–win situation for each member and heighten the profitability of the entire SC. By comparing the two contracts, we notice that the green supplier would like to offer the call option contract, and the retailer desires to accept the revenue-sharing contract in return.http://www.sciencedirect.com/science/article/pii/S277239092100010XSupply chain managementGreen productChannel coordinationCall option contractRevenue-sharing contract |
| spellingShingle | Mohamad Dehghan-Bonari Alireza Bakhshi Amir Aghsami Fariborz Jolai Green supply chain management through call option contract and revenue-sharing contract to cope with demand uncertainty Cleaner Logistics and Supply Chain Supply chain management Green product Channel coordination Call option contract Revenue-sharing contract |
| title | Green supply chain management through call option contract and revenue-sharing contract to cope with demand uncertainty |
| title_full | Green supply chain management through call option contract and revenue-sharing contract to cope with demand uncertainty |
| title_fullStr | Green supply chain management through call option contract and revenue-sharing contract to cope with demand uncertainty |
| title_full_unstemmed | Green supply chain management through call option contract and revenue-sharing contract to cope with demand uncertainty |
| title_short | Green supply chain management through call option contract and revenue-sharing contract to cope with demand uncertainty |
| title_sort | green supply chain management through call option contract and revenue sharing contract to cope with demand uncertainty |
| topic | Supply chain management Green product Channel coordination Call option contract Revenue-sharing contract |
| url | http://www.sciencedirect.com/science/article/pii/S277239092100010X |
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