Supply Chain Coordination Facing Consumer's Low-carbon Preference

China plans to launch a national carbon trading market in 2017,which makes carbon emission reduction become an influencing factor in the enterprise operation and management that cannot afford to ignore.It is a remarkable fact that a single enterprise's low-carbon capacity is limited,and building a low-carbon supply chain to cut emissions cooperatively is one of the effective ways for enterprises to obtain low-carbon competitive advantage.Meanwhile with the consumer's low-carbon preference increases,low-carbon level of the product has become an important part of consumer's value and utility.All of these have changed the cost structure and profit mode for supply chain firms and also the production mode,operational strategies and competition and cooperation strategies between the firms.They propose new issues for low-carbon supply chain management,such as: enterprises' emission reduction investment conditions,the supply chain performance and structural issues after the reduction investment,low-carbon supply chain business operations decision-making and coordination mechanisms design issues,etc.To solve these issues,considering the impact of emission reduction on the low-carbon product market demand,this paper focuses on a two-level low-carbon supply chain consisting of a retailer and a supplier who invests the carbon emission reduction,and discusses the operation and coordination strategies for the low-carbon supply chain in the following aspects:First of all,this paper establishes the lead-follow Stackelberg game models of supplier-led supply chain and retailer-led supply chain respectively under the information symmetry and obtains the optimal decisions on emission reduction investment conditions in different dominant power supply chains,pricing,cuts in emissions and so on.The comparative analysis shows that the optimal decentralized decision-making performance of the retailer-led supply chain is greater than that of the supplier-led supply chain and compared with the ordinary products,the different supply chain decision-making structure and environment and the increased market demand lead to a lower retail price for low-carbon products in certain centralized decision-making case,that is,low-carbon products are not necessarily high price.For the supplier-led supply chain,since the cost-sharing contract alone cannot solve the double marginalization problem to achieve low carbon supply chain coordination due to the transfer of the wholesale price mechanism to its profits,even though it does help improve the reductions,profits and free ride phenomenon based on a single wholesale price contract,this paper proposes a quantity discount contract under cost sharing and offers the optimal quantity discount strategy combination.For the retailer-led supply chain,this paper employs Nash bargaining game where the wholesale price is decided cooperatively between supplier and retailer accompanied by the slotting allowances to realize carbon emission reduction cooperation and distribute supply chain surplus profit.Further,to tackle the issue that the supplier may use private cost information to increase its own profits damaging the retailer and the supply chain's performance,this paper explores the supplier's cost misreporting behavior and supply chain coordination strategies in different dominant power supply chains under the information asymmetry.Introducing misreporting factors,asymmetric low-carbon supply chain decision model is built based on the research on information symmetric cases.It is demonstrated that supply chain dominance has an impact on the distribution of supply chain profits between supply chain members,the overall performance of the supply chain and also the optimal cost misreporting strategies of the supplier.The supplier does not misreport its cost information in the supplier-led supply chain,however,in the retailer-led supply chain,the supplier will take a single factor misreporting or double-factor misreporting strategy under each corresponding conditions to maximize its own profits;thus bringing negative effects to the reductions,prices and the retailer and the supply chain's performance.Therefore,this paper structures a type of linear compensation-punishment mechanism with fixed emission reduction depending on the wholesale price to coordinate this asymmetric phenomenon.With appropriate contractual parameters,this coordination mechanism could achieve perfect coordination of the low-carbon supply chain and distribute the supply chain profit between the supplier and the retailer freely while it motivates the supplier to feed back true cost information.All in all,this paper proposes the academic ideology that core firms lead emission reduction cooperation and the research method that design coordination mechanisms based on linear incentive contracts.It enriches the theory of low-carbon and asymmetric supply chain management,and also provides decision-making references for related firms and government agencies' low-carbon management practices.