Pricing and Carbon Emission Reduction Decisions in a Dual-Channel Supply Chain

Abstract

Due to the importance of environmental issues, customers prefer to buy low-carbon products and have an Ecofriendly behavior. Manufacturers produce the substitutable product under cap-and-trade regulations. Two chains are incompete on a product's green level, which is determined by the manufacturer. In some cases, firms have difficulties in providing sufficient capital to buy extra carbon emission quotas which force them to take loans from the banks. In this study, a two-echelon dual-channel supply chain consisting of one manufacturer and one retailer have been studied and a Stackelberg game is implemented on vertical and horizontal approaches. Various metaheuristic and hybrid metaheuristic methods are applied to optimize the revenue based on optimal decision variables such as retailer prices, carbon emission reduction rate, bank interest rate, and wholesale price. Performance of the applied methods are compared which determines the best algorithm in each case.