Sustainability Investment In A Supply Chain With Competing Manufacturers

With the intensification of environmental pollution and the emergence of climatic disasters such as global warming,sustainability issues have attracted great attention from society and relevant regulatory agencies.Meanwhile,for their own development and profits,companies have begun to make sustainability investments for themselves or their partners in the common supply chain.Sustainability investment refers to a form of investment made by companies to cope with climate change and environmental damage,enhance corporate social responsibility and improve their operational management.Sustainable investment can help reduce costs related to environmental tax and increase demands simultaneously.For products of the same category,retailers often have multiple manufacturers to supply.Competition is widespread among manufacturers.The increases of consumer environmental awareness and the emergence of carbon taxes have given supply chain members various motivations for sustainability investments.Since retailers are closer to consumers than manufacturers,they often have more accurate demand information than manufacturers.The value of the information has gradually been concerned by researchers.The existence of asymmetric information often changes the profits some members of the supply chain.Further,some critical decisions made by chain members will get influenced.Based on the above background,this paper considers a supply chain consisting of two competitive manufacturers and a common retailer,and researches the sustainability investment strategies with competing manufacturers.At first,under the condition of symmetric information,this paper models three sustainability investment strategies depending on different investors,i.e.both manufacturers,the common retailer,and single manufacturer.After solving these models and getting equilibrium solution,some analyses are presented.Then,under the condition of asymmetric information,this paper considers that the common retailer has private demand information and models three forms of information sharing,i.e.no information sharing,partial information sharing,and full information sharing.Solving different investment strategies,this paper researches the value of information in different strategies and the impacts of information on equilibrium investment strategies.In the chapter of introduction,the background,literature review and structure of this research are given.Chapter 1 presents the basic knowledge of relative theory and models.Chapter 2 models and solves investment strategies under symmetric information.Chapter 3 analyzes the equilibrium solutions in Chap.2.Chapter 4 models and solves investment strategies under asymmetric information.Chapter 5 analyzes the equilibrium solutions in Chap.4.The conclusion,managerial insights and possible future research are given in the chapter of conclusion and prospect.The results show that: under the condition of symmetric information,the single manufacturer inventment strategy cannot become an equilibrium strategy.Due to the competitive relationship between manufacturers,their profits may get hurts when they both make investments.Sustainability investment absolutely benefits the retailer.Then,comparing and analyzing the profits of supply chain members in different investment strategies,this paper gives the equilibrium strategy under different competition level and investment cost coefficient.Under the condition of asymmetric information,the equilibrium investment strategy will not get changed.Only in rare cases,the retailer will share information.When manufacturers make investment,all of the three forms of information sharing probably happen.However,the retailer will not share information with the upstream manufacturers when retail itself makes sustainability investment.