Coordination of R&D Effort, Pricing, and Periodic Review Replenishment Decisions in a Green Supply Chain through a Delay in Payment Contract

Abstract

This study contributes to the literature on supply chain coordination by coordinating the research and development (R&D) effort, retail price, and inventory decisions. It investigates a real case in the home appliance industry. The main purpose of this study is to examine the optimal values of R&D effort, pricing, and inventory decisions under decentralized and centralized structures. Then, a delay in payment contract is proposed under coordinated structure to simultaneously coordinate all decisions. Moreover, to share the extra profit obtained from the coordinated model between both parties, a profit allocation strategy is proposed. The findings reveal that the coordinated model not only enhances the green supply chain (GSC) profitability in comparison with the decentralized structure but also enhances the profits of all members. Further, the proposed contract improves the GSC performance from both environmental and economic viewpoints.