Online promotion format selection for a supply chain with environment responsibility in an uncertain market

Abstract

Corporate environmental responsibility has received considerable attention. In our study, we consider a supply chain in which a manufacturer invests in green technology to decrease the carbon footprint. The main issue addressed here is how the manufacturer selects the optimal online selling format between agency selling and reselling to ensure profitability with a lower carbon footprint. In an uncertain market with considering different pricing sequences in dual-channel promotion,we explore six scenarios. The results show that the different pricing sequences will not affect the equilibrium green degree and pricing strategies under agency selling, whereas it may result in an improved greenness in reselling format. Furthermore, under the interaction of uncertain demand, pricing sequence and green technology investment, we reveal the agent selling format is not always superior to the reselling format with a double-marginalization effect, which contrary to the general intuition. Specifically, in an optimistic market, the manufacturer is more profitable in reselling format when the promotion price set in online channel prior to traditional channel, and in a pessimistic market, the opposite pricing sequence formulated will bring a considerable benefit to the manufacturer.