Pricing and coordination of a dual-channel supply chain with consideration of carbon tax

Abstract

In order to protect environment and control carbon emissions, some governments have implemented low-carbon policies including carbon tax. The firms in the supply chain have to make decisions under these policies. We explore the pricing and coordination of a dual-channel supply chain under carbon tax. We obtain optimal prices and corresponding profits in centralized and decentralized systems and show the effects of carbon tax on carbon emissions and profits. In addition, we employ two price discount contracts to improve the performance of decentralized system and propose a transfer payment mechanism to make a win-win for supplier and retailer. This research bridges the gap in existing literature and gives some valuable insights for both firms' decision makers and governments' policy makers.