Abstract
A two-layer supply chain with a single manufacturer and a single retailer is studied in the context of the consumers' environmental awareness. We aim at determining joint pricing and the environmentally-friendliness level of a product under a deterministic demand pattern. Models under both linear and iso-elastic demand patterns have been studied. A centralized system is studied as the benchmark case. The popular price-only contract is studied, assuming the manufacturer to be the Stackelberg leader, and a wholesale-price-discount contract is developed on the decentralized system to coordinate the chain. The outcome of the proposed model is further illustrated through a numerical example.
Acknowledgements
The authors are very thankful to the anonymous referees for their comments and suggestions, which have improved the quality of the paper.