Cost-Sharing Contract of Supply Chain Based on Carbon Emission Control

Abstract

This paper studies the single cycle decision of the two-level supply chain cooperative emission reduction under the carbon emissions trading policy. Designed by Stackelberg game of retailer-led, manufacturer's follow-up, the analysis compares changes of the manufacturer's emission reductions, the retailer's order quantity, and both profit when whether there is a cost-sharing contract. The study found that after the contract was provided, under certain conditions, the profits of both parties can get a Pareto improvement and the manufacturer's product emission reductions and the optimal order quantity of the retailer and the ratio of the optimal cost sharing.