Supply Chain Coordination for Fashion Products: The Effect of Sustainable Investment on Two Contracts

Abstract

Sustainability concerns are becoming increasingly crucial for the growth of enterprises as environmental impact increases. Sustainable supply chains (SCs) can minimize resource waste, strengthen environmental protection responsibilities, enhance company reputation, and boost demand. This study examines the influence of cost-sharing (CS) and revenue-sharing (RS) contracts on SC profits, considering manufacturers and retailers making sustainable investments. Assuming consumer preference for sustainable products and government-imposed environmental taxes, the findings demonstrate that sustainability effectiveness enhances profits for manufacturers and retailers. Furthermore, CS contracts emerge as a more effective coordination strategy among SC participants compared to RS contracts.