An Incentive-based Bi-level optimization Model for Collaborative Green Product Line Design

Green product design aims to improve the environmental and social quality of products and has been recognized as one of the main issues in sustainable operations. This research proposes an incentive-based bi-level joint model to optimize the green product line design in order to deal with the trade-off underlying the profit and carbon emission based on the interactive relationship in a two-tier supply chain. A case study involving one manufacturer and one supplier is developed to test the proposed optimization model. A comparison between the non-incentive-based bi-level model and the incentive-based bi-level model is presented. It is found that the developed incentive-based joint optimization model can achieve a relatively better optimal solution to minimize the amount of carbon emission and maximize the product line profit.