Journal
TRANSPORTATION RESEARCH PART E-LOGISTICS AND TRANSPORTATION REVIEW
Volume 157, Issue -, Pages -Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.tre.2021.102446
Keywords
Supply chain; Outsourcing; Carbon tax; Consumer carbon awareness; Equilibrium decision model; Variational inequality
Categories
Funding
- National Natural Science Foundation of China [71972172]
- Humanity and Social Science Youth foundation of Ministry of Education of China [19YJA630101]
- Philosophy and Social Sciences Planning Foundation of Zhejiang Province [20NDJC114YB]
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This paper examines a supply chain with manufacturers and overseas suppliers facing different carbon tax rates and presents an equilibrium decision model for in-house production and outsourcing. Numerical examples analyze the impact of carbon tax rates and consumer's carbon awareness on production and outsourcing decisions, providing important managerial insights and implications for carbon policies.
A primary dilemma for multinational firms facing different emissions reduction regulations is determining what to produce in-house and what to outsource. We study a supply chain with manufacturers and overseas suppliers each facing different carbon tax rates. We present an inhouse production and outsourcing equilibrium decision model as well as a modified projection algorithm for this supply chain. Numerical examples focus on examining how carbon tax rates and consumer's carbon awareness affect in-house production and outsourcing decisions. Analysis of the numerical results provides important managerial insights and carbon policy implications which are thoroughly discussed in this paper.
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