School of Business, Anhui Provincial Key Laboratory of Regional Logistics Planning and Modern Logistics Engineering, Fuyang Normal University, No. 100 Qinghe West Road, Fu Yang 236037, China
The decision problem of a low carbon supply chain system comprising one manufacturer and one retailer under different risk aversion models is studied through comparative simulation analysis of decentralized and centralized decision models.
The influences of the risk aversion coefficient, consumer low carbon preference and carbon emission reduction cost coefficient on decision outcomes within the supply chain system are analyzed.
The research results show that when the retailer is completely risk averse, the decentralized decision model can achieve the same utility as the centralized decision model without using the coordination contract. When the manufacturer is risk neutral and the retailer is risk averse, the wholesale price under the decentralized decision model is lower than under the centralized decision model because a preference exists for low carbon and a reduction occurs in carbon emission.
Under a different risk aversion coefficient, the consumer low carbon preference coefficient and carbon emission cost coefficient have the same influence on the decision variables of the manufacturer and the retailer. Moreover, the decision variables correlate positively with the low carbon preference coefficient and are negatively related to the carbon emission reduction cost coefficient. Under different risk aversion models, the dual marginal utility caused by the decentralized decision model can be alleviated through risk aversion. The revenue sharing contract is then designed to perfectly coordinate the low carbon supply chain system. Finally, numerical simulation was used to analyze the manufacturer’s risk aversion coefficient, carbon emission reduction cost coefficient and consumer low carbon preference coefficient based on the results of the optimal decision running on Matlab.
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* Address correspondence to this author at the School of Business, Anhui Provincial Key Laboratory of Regional Logistics Planning and Modern Logistics Engineering, Fuyang Normal University, No. 100 Qinghe West Road, Fu Yang 236037, China; Tel: +8613966555561; E-mail: email@example.com