Joint replenishment and carbon trading in fresh food supply chains
Abstract We investigate a fresh food supply chain comprising a large scale supplier and multiple small scale retailers under a carbon cap and trade policy. Retailers' joint replenishment and the carbon trading behavior of supply chain members are studied. We assume that three replenishment strategies are available for the supply chain: (1) separate replenishment; (2) joint replenishment: a leader follower relationship among retailers; and (3) joint replenishment: the coalition of retailers. Under each strategy, a bargaining framework for supply chain members is set up to maximize their profits, where the price of the refrigerated transportation services provided by the supplier and the retail price of fresh food are optimized. The optimal decisions are analyzed to provide insights into logistics pricing and retail pricing strategies. Through comparing three replenishment strategies, we also identify the optimal replenishment strategies from the perspectives of the supplier, retailers and a carbon emission optimizer. Moreover, we investigate the role of the carbon cap and trade policy by comparing the cases with and without a carbon cap and trade policy. It is noteworthy that the goals of profit growth and emission reduction are simultaneously achieved under the carbon cap and trade policy.
Eur. J. Oper. Res.