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Green supply chain analysis under cost sharing contract with uncertain information based on confidence level

  • Nana Ma
  • Rong GaoEmail author
  • Xiaobin Wang
  • Ping Li
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Abstract

In this paper, we study supply chain coordination issues arising out of green supply chain consisting of a manufacturer and a retailer under cost sharing contract with uncertain information. Instead of expected utility maximization, we present an alternative decision rule based on confidence level, that is, both the manufacturer’s and the retailer’s aims are to maximize the potential incomes under their confidence levels. First, we obtain the equilibrium values for the decentralized and the centralized channel cases under the given confidence levels, then compare the equilibrium values between the decentralized channel case and the centralized channel case to motivate cost sharing contract framework. Second, we consider the retailer participates in the green channel and obtain that the manufacturer and the retailer incur higher profits in the cost sharing contract case than the decentralized supply chain case. Third, we propose a cost sharing contract between the players who bargain on the cost sharing parameter, and the contract benefits the manufacturer significantly through sharing of costs with the retailer.

Keywords

Green supply chains Channel coordination Cost sharing contract Uncertainty theory Confidence level 

Notes

Acknowledgements

This work was supported by the National Natural Science Foundation of China (Grant No. 61702389), Yanta Scholars Foundation of Xi’an University of Finance and Economics and Social Science Foundation of Hebei Province (Grant No. HB18GL036).

Compliance with ethical standards

Conflicts of interest

The authors declare that they have no conflict of interest.

Ethical approval

This article does not contain any studies with human participants or animals performed by any of the authors.

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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  1. 1.School of StatisticsXi’an University of Finance and EconomicsShaanxiChina
  2. 2.School of Economics and ManagementHebei University of TechnologyTianjinChina
  3. 3.School of Management Science and EngineeringShandong University of Finance and EconomicsJinanChina
  4. 4.College of Mathematics and PhysicsHuanggang Normal UniversityHubeiChina

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