Data-Driven Sustainable Supply Chain Decision Making in the Presence of Low Carbon Awareness

Abstract

Low-carbon production is a vital solution for many environmental problems, as is consumers’ consciousness about carbon playing a more important role and ultimately passing upstream. Supply chains are eager to seek sustainable development via appropriate decision making with data-driven methods. Consistent with this aim, we investigated decisions toward lower carbon efforts and prices in a two-echelon supply chain via a game theoretical approach. The decision-making scenarios of decentralized, centralized, and cost-sharing contracts were investigated and compared. The results show that the level of improvement in environmental performance is positively correlated with the degree of cooperation between partners. Cooperation between partners would be even more significant with an increase in consumers’ low carbon awareness. Furthermore, cost-sharing contracts improve the performance of the entire supply chain compared with decentralized cases. Finally, we implemented numerical experiments to verify the modeling results. Therefore, this study provides theoretical support toward sustainable operations for supply chains concerning low carbon awareness.