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Two Stage Supply Chain Enterprises’ Production and Reduction Decision-Making Mechanism Research Considering Emission Trading

Jianan Sun 1, Zhongdong Xiao 1, and Guanghui Zhou 2
1. School of Management, Xi’an Jiaotong University, Xi’an, Shaanxi, China
2. School of Mechanical Engineering, Xi’an Jiaotong University, Xi’an, Shaanxi, China

Abstract—Economic activities should reflect scarce and efficient allocation of environmental resources after carbon emission quota has become a kind of resource. These low-carbon economy characteristics profoundly change the cost structure, profit model and market risk compared with the traditional supply chain. This paper puts forward the topic ‘the research of two stage supply chain enterprises’ production and reduction decision-making mechanism considering emission trading’. The paper compares performance of the different decision modes in supply chain on carbon emission. Analyze the members profit and the whole supply chain profit by different two modes. Through investigating how upstream and downstream enterprises in the supply chain choose cooperation reduction strategy while they are facing environmental regulation, we can get their profits and reduction efficiencies in two different decision-making models. It can be obtained that in the centralized decision-making case, both their profit and reduction efficiency are optimal. The result shows that in the process of low carbonization of manufacturing enterprises, government should aim at the enterprises which emit larger carbon emission and grab from the source of supply chain firstly. And also enterprises must reduce their optimal output in order to reduce their total carbon emissions.

Index Terms—supply chain management, carbon emission permit, cap and trade, emission reduction level, carbon price

Cite: Jianan Sun, Zhongdong Xiao, and Guanghui Zhou, "Two Stage Supply Chain Enterprises’ Production and Reduction Decision-Making Mechanism Research Considering Emission Trading," Journal of Industrial and Intelligent Information, Vol. 4, No. 1, pp. 46-50, January 2016. doi: 10.12720/jiii.4.1.46-50
 

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