Sustainable Fashion Supply Chain Management Under Oligopolistic Competition and Brand Differentiation

Abstract

In this paper, we develop a new model of oligopolistic competition for fashion supply chains in the case of differentiated products with the inclusion of environmental concerns. The model assumes that each fashion firm’s product is distinct by brand and the firms compete until an equilibrium is achieved. Each fashion firm seeks to maximize its profits as well as to minimize its emissions throughout its supply chain with the latter criterion being weighted in an individual manner by each firm. The competitive supply chain model is network-based and variational inequality theory is utilized for the formulation of the governing Nash equilibrium as well as for the solution of the case study examples. The numerical examples illustrate both the generality of the modeling framework as well as how the model and computational scheme can be used in pratice to explore the effects of changes in the demand functions; in the total cost and total emission functions, as well as in the weights.

Keywords: fashion supply chain management, supply chain networks, product differentiation, brands, oligopolistic competition, sustainable supply chains, alternative transportation modes, Nash equilibrium, game theory