Yiwen Bian

Allocation of product-related carbon emission abatement target in a make-to-order supply chain

Carbon emission abatement target allocation in an MTO supply chain is investigated.Carbon emissions refer to those emitted in product producing and selling processes.Stackelberg game models are applied to deal with the allocation problem.Carbon emission abatement limits of firms are considered in the analysis.It is not bad to let the leader allocate the carbon emission abatement target. This paper investigates the product-related carbon emission abatement target (PCEAT) allocation problem in a decentralized make-to-order supply chain, which is composed of a manufacturer and a retailer. The product-related carbon emissions here refer to the total emissions generated from the product manufacturing and retailing processes. To effectively reduce carbon emissions on the product level in the whole supply chain, a compulsory PCEAT is imposed on each unit of product. The problem is how to allocate the PCEAT between the manufacturer and the retailer, where the allocator can be either firm. We use Stackelberg game models to solve this problem by considering the following four scenarios: (1) the manufacturer is the leader and the allocator; (2) the manufacturer is the follower and the allocator; (3) the retailer is the follower and the allocator; and (4) the retailer is the leader and the allocator. Ignoring the carbon emission abatement limits of firms, it is found that if the leader is the allocator, the proportions of the PCEAT allocated to the two participators are determined by their marginal abatement costs. If the follower is the allocator, the PCEAT will be completely allocated to the leader. When the abatement limits of firms are taken into consideration, the firm constrained by the limit will undertake the portion of PCEAT up to its limit; while the other firm should undertake the remaining part. In any case, we find that it is always not bad to let the leader allocate the PCEAT.

Online search-based advertising strategy for e-Business platform with the consideration of consumer search cost

Purpose Consumers are increasingly using search-based advertising in e-Business platforms to seek their desirable products. Platforms will choose a centralized advertising mechanism (CAM) or decentralized advertising mechanism (DAM) to offer a search advertising service to lower consumer search cost, as represented by using search time length. It is important for the platform to decide how to choose advertising mechanisms, and how to determine the optimal advertising price and search time length. To address these issues, this study aims to develop a theoretical approach under each mechanism to examine the platform’s optimal search-based advertising strategy by considering search cost. Design/methodology/approach In this study, two models are developed to examine the optimal search-based advertising strategy by considering consumer search cost (i.e. search time length). By comparing the platform’s profits under two models, the optimal advertising strategy, search time length and price are explored. Findings It is found that when the seller’s reserve benefit is sufficiently large, the platform benefits from choosing the DAM; otherwise, the CAM is a better choice. The advertising service is usually offered with a shorter search time length accompanied by a higher charge, and a longer search time length accompanied by a lower charge. Specifically, when the seller’s reserve benefit is substantially high, a DAM that benefits both the platform and seller is a better choice. This can explain why many platforms offer advertising services with a DAM. Originality/value This paper is the first theoretical study on addressing the search-based advertising strategy, especially the choice of advertising mechanisms, in the online advertising context. It is also the first piece of analytical research that considers the effect of consumer search cost on product demand, and then examines the optimal advertising price and search cost (i.e. search time length) for online platforms.

Service outsourcing under co-opetition and information asymmetry

Co-opetition refers to the phenomenon that firms simultaneously cooperate and compete in order to maximize their profits. This paper studies the contracting for an outsourcing supply chain (a user company vs. a service provider) in the presence of co-opetition and information asymmetry. The user company outsources part of his service capacity at a discount price to the service provider for sale. The service provider charges a commission for doing outsourcing work and competes with the user company for the service capacity to satisfy their respective demands. We solve for the service provider’s optimal commission decision and the user company’s optimal outsourcing decisions (outsourcing volume and price discount) when the user company has private information about his service capacity. Specifically, we highlight the following observations. For the service provider, a menu of two-part tariffs that consist of a fixed commission and a per-volume commission can reveal the true type of the user company’s capacity; the user company’s optimal outsourcing proportion is quasi-convex and the optimal price discount is non-decreasing in his capacity volume, which is counterintuitive.