Sustainable supply chain management: Dual sales channel adoption, product portfolio and carbon emissions

With rapid development and applications of information communication technologies, firms are increasingly adopting online sales channel to market remanufactured products in order to facilitate the sustainable operations of supply chains. In this context, firms face an important decision on how to allocate the product portfolio regarding both new and remanufactured products across the online and physical channels, which has significant impact on the profits and carbon emissions of the supply chain. This paper considers a supply chain consisting of a manufacturer and a retailer, and attempts to examine whether the manufacturer adopts the online sales channel and how to choose the optimal product portfolios. We find that the manufacturer will always adopt the online channel and this will definitely be detrimental to the retailer, but will not always hurt the whole supply chain. Interestingly, the manufacturer's optimal product portfolio depends on the cost saving from remanufacturing regardless of whether introducing the online channel. Specifically, when the cost saving is sufficiently large, the manufacturer's optimal product combination switching from both new and remanufactured products to only remanufactured product regardless of whether adopting the online sales channel strategy. We further explore the effects of introducing the online sales channel and product portfolio on carbon emissions, and find that this channel strategy will increase total carbon emissions but benefit the average emissions per product, and it is interesting that the product portfolio also has a significant effect on carbon emissions. (C) 2020 Elsevier Ltd. All rights reserved.

Automated summary

With the development of information communication technologies, firms are adopting online sales channel to market remanufactured products for sustainable operations. The optimal product portfolio for manufacturers depends on cost-saving from remanufacturing and can impact carbon emissions. The introduction of online sales channel strategy may increase total carbon emissions but benefit average emissions per product, and product portfolio choice also affects carbon emissions.