Equilibrium analysis and corporate social responsibility for supply chain integration |
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Authors: | Che-Fu Hsueh Mei-Shiang Chang |
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Institution: | 1. Department of Marketing and Distribution Management, Ching Yun University, Taoyuan 32097, Taiwan;2. Department of Civil Engineering, Chung Yuan Christian University, Taoyuan 32023, Taiwan |
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Abstract: | This paper evaluates the profit of coordination between manufacturers on corporate social responsibility (CSR) under network equilibrium. A three-tier supply chain network with multiple manufacturers, distributors, and retailers is considered, and several mathematical models are established to investigate behavior and profits in a decentralized supply chain network, a centralized supply chain network, and a supply chain network with CSR. The system-optimal solution of a supply chain network problem is usually not achievable or stable since each member always tries to maximize its own profit. In order to make such a system-optimal solution in a stable state and ensure the maximization of total profits, a strategy of coordination between manufacturers on CSR is proposed. The amount of payment in CSR of each manufacturer is clearly defined. A hybrid diagonalization method with a super-network representation is proposed and tested with numerical examples. The results show that by taking CSR, the total profits of the whole supply chain network can increase with or without coordination. |
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Keywords: | Supply chain management Network flows Corporate social responsibility Variational inequality |
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