The Effect of Renewable Energy and Corporate Social Responsibility on Dual-Channel Supply Chain Management

Abstract

Global energy demand has unquestionably increased significantly in recent years. Nowadays, industries are very aware of global warming, and to save the environment, they produce green products with energy consumption. Day by day, energy use is increasing due to population, end-use markets of construction, transportation, industry, etc. But the energy limit is finite, whereas the daily use is rising, so the price is increasing. In this study, two situations have been shown in two models with renewable energy consumption. Model 1 analyzes the manufacturer and retailer’s optimal green quality and sales price in two-echelon supply chain systems with centralized and decentralized cases. In this case, the retailer sells their products through three different channels: online, offline, and buy-online-pickup-in store, with three different selling prices. In Model 2, Manufacturer 1 and Manufacturer 2 produce green and regular products with renewable energy consumption. In this case, both manufacturers sell their products through three different channels: online, offline, and buy-online-pickup-in store, with three different selling prices. There is competition between substitutable products with respect to green quality and the selling price of the products. A hybrid channel policy is studied here to maximize the total profit with considering corporate social responsibility under renewable energy consumption. The study has been analyzed mathematically. The classical optimization approach and game theory are applied here to find the optimal values of procurement cost, selling price, and green quality development cost. A numerical study shows that the centralized system gives a better result to the manufacturer than the decentralized system. When the demand is a power function of the selling price, the manufacturer producing eco-friendly products gains 0.99% more profit than the conventional product. This result shows that manufacturers creating eco-friendly products motivate other manufacturers to make eco-friendly products.