A Strategic Decision-Making Model of Green Supply Network
Yuan Zengwei, Bi Jun, Wang Xiyuan, Zhang Bing and Huang Juan, Nanjing University, China
Abstract: Greening the supply network provides a tremendous opportunity for sustainable consumption. It has been a prevalent study field in the world. The available evidence has shown that greening the supply network can significantly enhance the overall competitive advantages of companies in the supply network through lowering costs, greening products, improving environmental performance, and producing less pollution. As of this writing, all the published models about green supply chain are built on the optimal economic benefit of companies. It is called green supply model just because it incorporates reverse logistics arcs. A more appropriate model should include firms’ environmental costs in the value flow analysis of green supply network. Based on the optimal comprehensive benefits of economics, environment and society, this paper develops an integrated strategic decision-making model of green supply network. The model assumes that all the actions are coordinated according to marketing rules that environmental cost is a part of the basic production costs, and that companies must implement extended production responsibility. The model structure consists of suppliers, manufacturers, third-party logistics providers, and distribution centers. The model incorporates forward logistics arcs, reverse logistics arcs, and international trade issues (if it is a multinational company). The model can be used for strategic decision-making to solve problems such as locations of facilities, inventory, shipping, selection of third-party logistics providers, and take-back issues.

Keywords: green supply network; strategic decision-making model; sustainable development