Research On Retailer Decision Models Under Carbon Emission Policies

The ever-increasing greenhouse gas emissions are posing serious challenges to people’s survival and development, accordingly, changing people’s consumption habit and achieving sustainable low-carbon development have attracted great attention all over the world. National governments have created carbon emission policies so as to curb the global climate change. As the principal part of peoples’ economic activities, enterprises are faced with enormous pressure in low-carbon development. On one hand, the decision-making objectives, decision variables and decision environments become more complex under different carbon emission policies. On the other hand, the size of the carbon footprint turns into one of the most significant factors in consumers’ purchase decision-making because of quantification of greenhouse gases and consumers’ increasing environmental awareness. Only by considering consumers’ carbon sensitive demand and adjusting operation decisions to acclimatize to governments’ carbon emission policies can enterprises succeed in low-carbon market competition.Taking into account features of consumers’ carbon sensitive demand, this dissertation studies a single retailer’s optimal transportation mode selection, optimal pricing strategy and optimal ordering strategy with both deterministic demand and stochastic demand under carbon cap policy and carbon cap and trade policy. Meanwhile, it analyzes how retailer’s optimal decision and maximum(expected) profit are affected by consumers’ carbon sensitive demand, carbon cap policy, carbon cap and trade policy, and fluctuation of stochastic demand.Firstly, retailer’s decision-making models are explored without taking account of carbon emission policies. The study shows that:(1) no matter it is with deterministic demand or stochastic demand, whether or not consumers’ carbon sensitive demand is considered, as long as the model parameter satisfies certain conditions, retailer’s optimal pricing strategy and optimal ordering strategy exist and are unique;(2) with deterministic demand, the optimal retail price is in direct proportion to unit product transportation cost and in inverse proportion to unit product transportation carbon emissions; the optimal transportation mode selection depends on the effect of the difference values of unit product transportation cost and unit product transportation carbon emissions of two transportation modes on demand;(3) with stochastic demand, when consumers are less sensitive to price, the optimal retail price and optimal order quantity are in direct proportion to unit product transportation cost and unit product transportation carbon emissions; when consumers are more sensitive to price, the optimal order quantity is in inverse proportion to unit product transportation cost and unit product transportation carbon emissions;(4) demand fluctuation is in inverse proportion to the optimal retail price and maximum(expected) profit but in direct proportion to the optimal order quantity.Secondly, retailer’s decision-making models are explored under carbon cap policy. The study shows that:(1) with deterministic demand, whether or not the consumers’ carbon sensitive demand is considered, as long as the model parameter satisfies certain conditions, retailer’s optimal transportation mode, optimal pricing strategy and optimal ordering strategy exist and are unique;(2) no matter it is with deterministic demand or stochastic demand, initial carbon emission quota divides transportation modes into low-carbon emission transportation mode, low-cost transportation mode, and the mixed transportation mode of the former two; the optimal order quantity is relevant to initial carbon emission quota and unit product transportation carbon emissions; the effect of unit product transportation mode parameter on retail’s optimal decision making differs due to different transportation mode selections;(3) the effect of risk aversion coefficient and stochastic demand fluctuation on retail’s optimal decision-making differs due to different transportation mode selections.Lastly, retailer’s decision-making models are explored under carbon cap and trade policy. The study shows that:(1) no matter it is with deterministic demand or stochastic demand, whether or not consumers’ carbon sensitive demand is considered, as long as the model parameter satisfies certain conditions, retailer’s optimal pricing strategy and optimal ordering strategy exist and are unique;(2) with deterministic demand, the optimal retail price is in direct proportion to unit product transportation cost and carbon trade price, and its relation with unit product transportation carbon emissions depends on carbon trade price; retailer’s transportation mode selection also depends on carbon trade price;(3) with stochastic demand, the optimal retail price and optimal order quantity change with unit product transportation mode parameter, and the critical value equals to the threshold of consumers’ price-sensitive level; the optimal transportation mode selection depends on carbon trade price;(4) stochastic demand fluctuation is in inverse proportion to the optimal retail price and maximum profit but in direct proportion to the optimal order quantity.This dissertation also provides some inspirations for management through comparative analysis and numerical simulation.(1) Effect of carbon sensitive demand. Within some range of parameters, under the three circumstances of taking no account of carbon emission policies, taking account of carbon cap policy and taking account of carbon cap and trade policy, consumers’ carbon sensitive demand will make retailers choose low-carbon emission transportation mode. Under the circumstances of taking no account of carbon emission policies and taking account of carbon cap and trade policy, compared with the findings under the circumstance of taking no account of carbon sensitive demand, the optimal ordering strategy, optimal pricing strategy and maximum profit will decrease with deterministic demand under the circumstance of taking account of carbon sensitive demand; with stochastic demand, the effect of carbon sensitive demand on the optimal pricing strategy, optimal ordering strategy and maximum(expected) profit depends on the threshold of consumers’ price-sensitive level. Under carbon cap policy, within some range of parameters, compared with the findings under the circumstance of taking no account of carbon sensitive demand, the optimal price and maximum profit will decrease, and the optimal order quantity is invariant under the circumstance of taking account of carbon sensitive demand.(2) Effect of carbon cap policy and carbon cap and trade policy. Both carbon cap policy and carbon cap and trade policy will make retailer choose low-carbon emission transportation mode. With deterministic demand, under carbon cap and trade policy, compared with the findings under the circumstance of taking no account of carbon cap and trade policy, the optimal order quantity will decrease, the optimal retail price will increase, and the profit depends on initial carbon emission quota; with stochastic demand, the effect of carbon cap and trade policy parameter(carbon trade price) on the optimal pricing strategy, optimal ordering strategy and maximum(expected) profit depends on the threshold of consumers’ price-sensitive level; the carbon cap and trade policy parameter(initial carbon emission quota) has no effect on the optimal pricing strategy and optimal ordering strategy but is in direct proportion to the maximum(expected) profit. Under carbon cap policy, compared with the findings under the circumstance of taking no account of carbon cap policy, retailer’s optimal order quantity and maximum(expected) profit will decrease but retail price will increase under the circumstance of taking account of carbon cap policy.The results of the study in the dissertation provide new ideas for retailers to carry out micro operations and also make references for governments to create carbon cap policies and carbon cap and trade policies, thus have great theoretical significance and practical value.