Manufacturer Decision-making Considering Carbon Emission Permit With Option Contract

China's carbon trading market has also been fully opened.The state's control over carbon emission rights mainly includes carbon trading,and carbon allowances.With the government's active promotion of low-carbon and environmentally-friendly products,consumers are increasingly demanding low-carbon products.When go to shopping,they not only consider the product price and quality,but also pay attention to the carbon label of products.Low-carbon companies need to conduct carbon emissions trading activities when they produce products,or develop low-carbon technologies and equipment to reduce carbon emissions.According to the carbon emission rights trading situation in the carbon trading market,the price of carbon emission trading is fluctuating,and the uncertainty of carbon price fluctuations brings strong challenges to supply chain management.In addition to facing the low carbon preference of consumers and the risk of price fluctuations of carbon emission rights,supply chain companies are also facing the problem of intensified competition for low-carbon products,accelerated development of low-carbon technologies and equipment,and the resulting supply chian decisions are more complicated,demand and The uncertainty brought about by supply has made the problem of survival and operation of enterprises more and more prominent.Therefore,the core issue of supply chain production arrangements is the effective management of supply chain product demand and supply,carbon emission trading price and other uncertainties.Companies co-exist in the carbon trading market to purchase carbon emission rights and purchase carbon emission rights through option strategies,the choice of purchasing carbon emission rights plays a key role in supply chain decision-making and performance.Therefore,this paper introduces option contracts to study the strategy of manufacturers using option contracts to purchase carbon emission rights.This paper considers a two-tier supply chain consisting of a dominant manufacturer facing price fluctuations in carbon emissions trading and a retailer facing a random market demand for products.Based on the manufacturer's real-time purchase of carbon emission rights strategy model as the benchmark model,by constructing the supply chain game model of carbon emission rights by constructing call options,put options and bidirectional option contract respectively,the carbon market and the option market coexisting carbon are studied.Emissions trading price and product market demand stochastic supply chain ordering and production decisions,respectively,The supply chain decisions are compared between the immediate purchase strategy and the call option,put option and bidirectional option strategy in a manufacturer-led supply chain.The effect of the carbon emission of per unit product,carbon price and options cost on supply chain decisions and profits are checked under the different carbon emission permit purchase strategies.The main findings are as follows:(1)The results show that the manufacturer purchases carbon emission permit only in the form of the call option contract.No matter how the carbon emission of per unit product change,the call option contract strategy not only effectively improves the order quantity,but also enhances the profit of all the parties.The call options purchase quantity of carbon emission permit is less impacted by the carbon price.When the carbon price is large enough,the manufacturer's profit under the call option contract strategy is higher than that under the immediate purchase strategy under the decentralization pattern,and the profits of the retailer and the supply chain are also increased.There is a threshold of the call options cost on carbon emission permit,the option strategy is used by manufacture can improve the profits of manufacture,retailer and supply chain when the call options cost on carbon emission permit is less than the threshold.(2)As long as the manufacturer sells the carbon emission right in the form of a put option,the manufacturer will not wait until the quota is redundant to sell the carbon emission right at the instant price.The carbon emissions per unit of product increased and the purchases of manufacturers' put options decreased.Compared with the immediate purchase strategy,manufacturers adopt a carbon emission right put option strategy to reduce the risk of fluctuations in the trading price of carbon emission rights and increase the profit of the supply chain.When the average carbon price increases,the dominant position of the manufacturer makes its own profit rise,and the added profit is much larger than the profit reduced by the retailer.Therefore,the supply chain profit increases with the average carbon price.The carbon emission right put option purchase is negatively correlated with the carbon emission trading price,and the supply chain profit is positively correlated with the carbon emission trading price.The lower the threshold for the purchase of carbon options,the higher the option purchase,the higher the option purchase,the manufacturer uses the put option contract to purchase carbon emission rights,although it damages its own profits,but improves the retailer and supply chain profits.(3)Under the bidirectional option contract,the manufacturers use bidirectional options when the order quantity is large or small.The average carbon emissions per unit product and carbon price increase,manufacturers' bidirectional option purchases and supply chain profits are reduced.Compared with the immediate purchase decentralized decision-making,manufacturers adopt carbon emission rights bidirectional option strategy to bear the cost of carbon emission rights alone.Its own profits have increased retailers and profits,and increased retailer and supply chain profits can be used to compensate manufacturers for losses.With the increase in the price of the bidirectional option and the execution price,the purchase cost of the carbon emission option amount increases,and the purchase amount of the bidirectional option decreases accordingly.