Price Decision in a Two Stage Supply Chain with Carbon Tax and Green Subsidies

We examine the decision problems for one retailer and one manufacturer in a supply chain under the influence of governmental via carbon tax policy and subsidy financial instruments, in which manufacturer produces two kinds of products to a retailer, and the retailer resells them to the customers with price dependent demand. The two-stage game-based models under three different carbon tax policies are constructed to formulate the aforementioned decision problem in a supply chain. Comparison analysis for pricing decision models under different carbon tax policies is performed and some managerial insights are drawn. At last, a numerical example is given to demonstrate the effectiveness of the proposed models and conduct sensitiveness analysis. The impact of manufacturer’s production costs, government carbon tax and green subsidy on the profits of manufacture, retailer and supply chain is analyzed.