Retail location competition under carbon penalty

Download

index.pdf

Date

2018-08-16

Author

Dilek, Hande
Karaer, Özgen
NADAR, EMRE

Metadata

Show full item record

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Item Usage Stats

164
views

0
downloads

We study the retail location problem in a competitive linear market in which two retailers simultaneously choose their locations. Both retailers procure identical products from a common supplier and each consumer purchases from the closest retailer. Each retailer incurs transportation costs for inventory replenishment from the warehouse and consumer travels to the store. We consider two carbon tax schemes imposed on retailers: for supply-chain-related transportation and for consumer-related transportation. Our analysis indicates that intense competition between retailers leads to a "minimal differentiation" equilibrium, which substantially increases the total system emissions. According to our numerical experiments with realistic parameter values, carbon tax on supply-chain-related transportation does not affect retail location decisions. Carbon tax on consumer transportation, however, may effectively induce the retailers to approach the middle of their respective markets, reducing the total system emissions. Our analysis also indicates that a low carbon price, relative to market profitability, only reduces the total system profit without any effect on emissions. Our findings suggest that the central policymaker avoid a uniform carbon price across different sources of emission and sectors with different characteristics.

Subject Keywords

OR in environment and climate change, Retail location, Competition, Carbon penalty, Game theory

URI

https://hdl.handle.net/11511/47599

Journal

EUROPEAN JOURNAL OF OPERATIONAL RESEARCH

DOI

https://doi.org/10.1016/j.ejor.2017.10.060

Collections

Department of Industrial Engineering, Article

Suggestions

OpenMETU
Core

Retail Channel Management with Product Differentiation Uğur, Gülçin; Karaer, Özgen (null; 2016-05-06) We analyze a monopolist retailer's channel management decisions in a product differentiation context. Historically, retailers developed a physical outlet presence after developing their primary brand chain. Here, we evaluate the online channel decisions of a retailer and its interaction with the physical channels available; possibly both primary and outlet chains
Price competition between manufacturers selling to a common retailer under stock-out-based substitution Kılıç, Betül Diler; Karaer, Özgen; Bakal, İsmail Serdar (2022-12-01) We consider two partially substitutable products sold through a two-echelon supply chain, consisting of two manufacturers and one retailer. In case of a stock-out in one of the products, that product's demand can spill over to the competing product. We analyze the equilibrium pricing decisions of the manufacturers and ordering decision of the retailer in a three stage dynamic game for a single period. We investigate the effect of spillover rates on equilibrium decisions. We also evaluate the impact of spill...
Multi-facility green Weber problem Atashi Khoei, Arsham; Süral, Haldun; Tural, Mustafa Kemal (2020-01-01) Locating facilities to satisfy the demands of customers is a strategic decision for a distribution system. In this article, we study the multi-facility green Weber problem (MF-GWP), an extension of the classical multi-facility Weber problem, that considers environmental concerns in a distribution system in the context of a planar facility location problem. In the MF-GWP, the vehicles are sent directly from the facilities to the assigned customers to satisfy their demands. Each customer has a deadline and th...
Limited quantity flexibility in a decentralized supply chain Karakaya, Selçuk; Bakal, İsmail Serdar; Department of Industrial Engineering (2010) In this study, we analyze a decentralized supply chain with a single retailer and a single manufacturer where the retailer sells two products in a single period. The products offered by the retailer consist of families of closely related products, which differ from each other in terms of a limited number of features only. The retailer places initial orders based on preliminary demand forecasts at the beginning of the period and has an opportunity to modify his initial order after receiving perfect demand in...
Joint quantity flexibility under market information update Oskay, Mine Gülden; Bakal, İsmail Serdar; Department of Industrial Engineering (2013) In this study, we consider a decentralized supply chain consisting of a single retailer and a single manufacturer who manufacture two products in a given single period. The retailer commits to purchase an aggregate order quantity for the products at the beginning of the period before information on the market condition is revealed. Accordingly, the manufacturer then determines its initial production quantities for the products. Once market condition is revealed the retailer allocates its initial order to in...

Citation Formats

H. Dilek, Ö. Karaer, and E. NADAR, “Retail location competition under carbon penalty,” EUROPEAN JOURNAL OF OPERATIONAL RESEARCH, pp. 146–158, 2018, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/47599.