A Dual-Channel Supply Chain Coordination under Carbon Cap-and-Trade Regulation

We consider a dual-channel supply chain coordination under a carbon cap-and-trade regulation. The dual-channel refers to the traditional retail channel and the network direct channel, and both two channels’ selling prices can affect the market demand. We formulate the problem as a supplier-Stackelberg game model and obtain the optimal pricing decisions and corresponding profits in centralized and decentralized systems. We explore the effects of cap-and-trade regulation on optimal decisions and profits. To improve the performance of the decentralized system, we propose online channel price discount and offline channel price discount contracts to coordinate dual-channel supply chain and provide a transfer payment mechanism to make win-win of both sides. Moreover, we investigate how carbon regulation affects the coordination performance. Numerical examples illustrate the process to find the appropriate price discount coefficient and show the coordination effects of two contracts.