Studying the effect of carbon tax policy on a dual-channel supply chain for deteriorating products

The present study tries to investigate a joint inventory-pricing control problem in a dual-channel supply chain network for deteriorating products under carbon tax regulations. To this end, a mathematical model is developed with an objective function that can maximize the total profit. Then, the model is solved using the hybrid algorithm combined with the simulated annealing (SA) algorithm and the Gradient descent search. The theoretical results show that the developed model is concave. Findings suggest that an increase in the deterioration rate reduces the total profit. Moreover, whenever the carbon tax rises, the manufacturer tends to decrease the number of deliveries to the retail store but increases the amount of the delivered products in order to avoid unnecessary costs. Based on our results, price elasticity is the most influential parameter to determine the total profit of the dual-channel supply chain for deteriorating products under carbon tax policies.

Automated summary

The present study investigates a joint inventory-pricing control problem in a dual-channel supply chain network for deteriorating products under carbon tax regulations. A mathematical model is developed to maximize the total profit. The model is solved using a hybrid algorithm combined with the simulated annealing (SA) and Gradient descent search. The findings show that the developed model is concave. An increase in the deterioration rate reduces the total profit. Moreover, an increase in carbon tax leads the manufacturer to decrease the number of deliveries while increasing the amount of delivered products.