Abstract:

The rapid development of economy， society and cities is leading to environmental pollution and shortage of natural resources worldwide， and it also makes the issue of green environmental protection the focus of attention. Now that the issue of green development has received extensive attention from all parties， how to conduct green supply chain cooperation has also become the focus of business management research. Motivated by these actual problems， a secondary supply chain composed of one traditional products manufacturer， one green manufacturer and one retailer is constructed. Both manufacturers sell their products through the retailer. There is substitutability between these two products.As a member of the supply chain， each manufacturer can trade with the retailer through the wholesale price contracts， or cooperation with the retailer based on the revenue sharing. In addition， for the green manufacturer， besides of adopting a revenue-sharing contract， he can also choose to cooperate with the retailer to share green manufacturing costs to maximize his profit. Therefore， the following three possible cooperation modes are discussed in this paper： （i） the traditional manufacturer chooses to cooperate with the retailer based on the revenue sharing contract， and the green manufacturer doesn’t cooperate with the retailer； （ii） the traditional manufacturer doesn’t cooperate， and green manufacturers choose to cooperate with the retailer based on revenue sharing and greening cost sharing； （iii） the traditional manufacturer chooses to cooperate with the retailer based on revenue sharing， and the green manufacturer and the retailer carry out revenue sharing and green production cost sharing cooperation. Based on this， the optimal decision-makings and the profits of supply chain members under different cooperation modes are studied， and through comparative analysis， which cooperation strategy the supply chain members should choose is explored to be most profitable under the green and substitutability supply chain. Finally， supply chain coordination under the three cooperation strategies is discussed.The main insights obtained from this article are as follows. First， under the three cooperation models， the retail/wholesale prices of both green and traditional products are directly proportional to the consumer’s green sensitivity coefficient. Second， under the circumstance of manufacturer-led， the revenue-sharing cooperation with the retailer has a positive effect on the green manufacturer to improve the greenness of products； the cost-sharing cooperation between the green manufacturer and the retailer will also help them improve the greenness of green products. The finding shows that the greater the proportion of green manufacturing costs borne by the retailer， the higher the green level that green products can achieve. Besides， under these three cooperation models， the optimal profit that each manufacturer can obtain when only traditional manufacturer cooperates with the retailer is the smallest， indicating that green manufacturer should actively seek to share revenue and green production cost to increase their own profits； and the optimal profit of each manufacturer is proportional to the proportion of the green manufacturing cost borne by the retailer. It can be seen that the green manufacturer can increase the manufacturer’s profitability by cooperating with the retailer. However， the retailer only has a poor improvement effect and obtains lower profits when only cooperating with the manufacturer producing the traditional product， and can obtain higher profit by cooperating with both manufacturers. Finally， from the perspective of the whole supply chain， the coordination of supply chain can be realized only when both manufacturers cooperate with the retailer. It is also shown that Pareto improvement can be achieved between channel members when the green cost sharing ratio is in a certain range.

Key words: green products, profit sharing policy, cost sharing policy, policy selection, Pareto improvement