Highlights We investigate how carbon tax can affect production and outsourcing decisions. An in-house production and outsourcing equilibrium decision model is presented. A modified projection algorithm is presented for the proposed model. We arrive at important managerial insights and carbon policy implications.
Abstract A primary dilemma for multinational firms facing different emissions reduction regulations is determining what to produce in-house and what to outsource. We study a supply chain with manufacturers and overseas suppliers each facing different carbon tax rates. We present an in-house production and outsourcing equilibrium decision model as well as a modified projection algorithm for this supply chain. Numerical examples focus on examining how carbon tax rates and consumer’s carbon awareness affect in-house production and outsourcing decisions. Analysis of the numerical results provides important managerial insights and carbon policy implications which are thoroughly discussed in this paper.
In-house production and outsourcing under different emissions reduction regulations: An equilibrium decision model for global supply chains
2021-08-04
Aufsatz (Zeitschrift)
Elektronische Ressource
Englisch
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