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Supply chain network sustainability under competition and frequencies of activities from production to distribution

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Abstract

In this paper, we develop a competitive supply chain network model with multiple firms, each of which produces a differentiated product by brand and weights the emissions that it generates through its supply chain network activities in an individual way. The supply chain network activities of production, transport and distribution, and storage have associated with them distinct capacities and the firms seek to determine their optimal product flows and frequencies of operation so that their utilities are maximized where the utilities consist of profits and weighted emissions. Multiple production, storage, and transport mode options are allowed. The governing equilibrium concept is that of Cournot–Nash equilibrium. We provide both path and link flow variational inequality formulations of the equilibrium conditions and then propose an algorithm, which, at each iteration, yields closed form expressions for the underlying variables. Numerical examples illustrate the generality of the model and the information provided to managerial decision-makers and policy-makers. This paper adds to the growing literature on sustainable supply chains through the development of a computable general competitive supply chain network game theory model, which brings a greater realism to the evaluation of profit and emission trade-offs through the incorporation of frequencies.

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Acknowledgments

The first author acknowledges support from the School of Business, Economics and Law at the University of Gothenburg through its Visiting Professor Programme. The authors are grateful to the two anonymous reviewers and to the Guest Editors for helpful comments and suggestions on an earlier version of this paper.

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Authors and Affiliations

  1. Department of Operations and Information Management, Isenberg School of Management, University of Massachusetts, Amherst, MA, 01003, USA

    Anna Nagurney

  2. School of Business, Economics and Law, University of Gothenburg, Gothenburg, Sweden

    Anna Nagurney & Jonas Floden

  3. Pamplin School of Business Administration, University of Portland, Portland, OR, 97203, USA

    Min Yu

Authors
  1. Anna Nagurney
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  2. Min Yu
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  3. Jonas Floden
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Correspondence to Anna Nagurney.

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Nagurney, A., Yu, M. & Floden, J. Supply chain network sustainability under competition and frequencies of activities from production to distribution. Comput Manag Sci 10, 397–422 (2013). https://doi.org/10.1007/s10287-013-0190-6

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  • DOI: https://doi.org/10.1007/s10287-013-0190-6

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