Abstract: Focal firm’s work is usually outsourced to a number of suppliers. Consumers suggest that the focal firm is responsible for suppliers’ environmental performance. Thus, the focal firm’s market demand is affected by suppliers’ environmental performances. This promotes focal firms to stimulate their suppliers to reduce emissions. Allocating orders to suppliers is the focal firm’s regular decision. Thus, there is no need to sign extra contracts if the focal firm stimulates suppliers to reduce emissions through order allocation process. It has been found that the reason why focal firms have the ability to influence their suppliers’ behavior is that they have the power to allocate orders. In this study, an order allocation method that could stimulate suppliers to reduce emissions is designed a for focal firm.

Key words: focal firm of supply chain; order allocation; emission reduction behavior; computational experiment