Sustainable integrated and pricing decisions for two-echelon supplier–retailer supply chain of growing items

Abstract

In today’s market, supply chain players have to cooperate mutually for extra benefits, long lasting paybacks, and to control carbon emission for a clean environment. In this study, a two-echelon sustainable supply chain model with a supplier–retailer scenario is considered to investigate the overlooked area of growing items and reducing carbon emissions. These joint effects will benefit the firms for interim financing as well as minimize carbon emission for a clean environment. The main task for the supplier is to breed new-born animals with respect to a biologic growth pattern, then slaughters them and controls the carbon emission to maintain the sustainability. The supplier then delivers the slaughtered items to the retailer where it is used as final products to satisfy customers demand and also experienced deterioration during the inventory replenishment cycle. Carbon emission is considered due to transportation of slaughtered items to the retailer. The main goal of this paper is to analyze the model under decentralized and centralized chain structures and in the centralized case profit-sharing contract is incorporated as the cooperation tool. The model has been solved with an analytic solution approach to obtain the global optimum solution. Sensitivity analysis is carried out to investigate the impact of different input parameters. The results support the claim that centralized chain structure can provide the partners with more benefits if an appropriate coordination mechanism is applied. Moreover, it is shown that the unit purchasing cost of each echelon has a significant effect on the profit in comparison to the other cost factors. Finally the results reveal that the supplier’s inventory cycle is more dependent on the growth pattern rather than external cost factors.