Cooperative decision in a closed-loop supply chain considering carbon emission reduction and low-carbon promotion

This study examines manufacturers' carbon emission reduction level and retailers' low-carbon promotion effort in a low-carbon closed-loop supply chain (CLSC), in which a manufacturer directly collects the used-products from consumers. Considering both the carbon emission reduction level and low-carbon promotion effort depending on the market demands, this study investigates the optimal decisions and performances of CLSC under four different game structures, that is, one non-cooperative structure and three cooperative structures. In the non-cooperative structure, the manufacturer controls the carbon emission level, the collection level as well as the wholesale price, while the retailer controls the low-carbon promotion effort and retail price. The cooperative structures consist of one-way and two-way cooperation. In one-way cooperative structure, the manufacturer shares only a part of retailer's low-carbon promotion cost. In two-way cooperative structure, the retailer shares partial manufacturer's carbon emission reduction cost or collection cost based on the one-way cooperative structure. It shows that the two-way cooperative structure of the co-op promotion and carbon emission reduction is the optimal in pricing decisions and carbon emission reduction level, as well as two-way cooperative structure of the co-op promotion and collection is the optimal in the collection effort. Under lower the consumer's low-carbon preferences, the retailer agrees to share the manufacturer's collection cost. When the consumer's low-carbon preferences are higher, the retailer agrees to share the manufacturer's carbon emission reduction cost. (c) 2018 American Institute of Chemical Engineers Environ Prog, 38: 143-153, 2019