How does water-saving service contribute to the sustainability of supply chain? A game-theoretical modelling study

Abstract

Abstract Currently, water-saving service (WSS) providers are devoted to providing high-water-consumption (HWC) supply chains with comprehensive water-saving solutions. In this context, the decentralized and cooperative decision models for HWC supply chain under the benchmark scenario without WSS, and the decentralized, hybrid and cooperative decision models for the three-tier WSS supply chain under the scenario with WSS are developed and analyzed, the corresponding numerical and sensitivity analyses for all models are conducted and compared, and finally, the managerial insights are summarized. The research results indicate that: (1) introducing WSS could effectively increase the profits, social welfare and consumer surplus for the HWC supply chain; (2) a cooperative strategy could effectively increase the profits, social welfare and consumer surplus and is the best strategy for the three-tier WSS supply chain; (3) the hybrid strategy (partial cooperative strategy) could effectively increase the profits, social welfare and consumer surplus and is the second-best strategy for the three-tier WSS supply chain; (4) reducing the costs of water saving could effectively enhance water consumption reduction, increase the profits, social welfare and consumer surplus for the three-tier WSS supply chain.