Simultaneous coordination of order quantity and corporate social responsibility in a two-Echelon supply chain: A combined contract approach

Abstract

The main aim of this paper is to synthesize CSR issue into channel coordination. Accordingly, the CSR issue is studied in a manufacturer-retailer chain under two cases: (1) the manufacturer invests in CSR, and (2) the retailer invests in CSR. Each case is explored in terms of the individual profitability of supply chain (SC) members and the amount of CSR investment. Moreover, we propose a hybrid of wholesale and buyback contract to resolve the channel conflict in both cases. Additionally, a Nash bargaining model is applied to share the surplus profit between SC players. Under decentralized setting, the numerical results indicate that both cases bring almost the same results for the members regarding their profitability, but regarding the investment in the CSR issues, the M-CSR case is remarkably superior to the R-CSR case. Moreover, the Nash bargaining model provides a win-win situation for both SC members in each case.

Keywords:

• Channel coordination
• composite contract
• order quantity
• corporate social responsibility

Disclosure statement

No potential conflict of interest was reported by the authors.