ABSTRACT
The collection and distribution network of ports is the main cause of carbon emissions. The carbon peak is a basic policy in China, and the subsidy policy is one of the common measures used by the government to incentivize carbon reduction. We analyzed the transportation methods and the flow direction of a port and proposed a carbon emission calculation method based on emission factors. Based on the transportation time and the cost, a generalized transportation utility function was constructed, and the logit model was used to analyze the impacts of subsidy policies on transportation, thus calculating the effects of the subsidies on carbon reduction. We used Guangzhou Port as a case study, and calculated the carbon reduction effects in six different subsidy policy scenarios and concluded that the absolute carbon reduction value was proportional to the subsidy intensity. In addition, we constructed a subsidy carbon reduction efficiency index and found that the Guangzhou Port collection and distribution network had higher subsidy carbon reduction efficiency in low-subsidy scenarios. Finally, a sensitivity analysis was conducted on the subsidy parameters, and scenario 8 was found to have the highest subsidy carbon reduction efficiency. This achievement can provide decision support for the carbon emission strategy of the port collection and distribution network.
ABSTRACT
Multinational firms can outsource to contract manufacturers in low-labor-cost regions. However, in recent years, several developed countries and regions have subsidized their local manufacturers (LM[s], she) to encourage reshoring for external benefit (e.g., creating more domestic jobs or improving industrial struc-ture), especially after the COVID-19 pandemic started. This paper investigates the sourcing problem of an LM with brand premium in the presence of government subsidy and differences in labor costs. An LM faces three options: producing in-house, outsourcing to an original brand manufacturer (OBM, he), which sells competitive substitutes without brand premium, or outsourcing to a non-competing contract manu-facturer (NCM). We find that, first, the LM chooses reshoring if the external benefit or brand premium is sufficiently high. Second, if the LM decides to outsource, she chooses the OBM (NCM) if her brand pre-mium is high (low). Third, the government prefers to subsidize LM reshoring or outsourcing to an NCM. If the government intends to induce LM to reshore, the subsidy should be at a moderate level. Interestingly, when the LM has a low brand premium but chooses outsourcing, the government still subsidizes her to improve her competitiveness.(c) 2022 Elsevier B.V. All rights reserved.
ABSTRACT
During a pandemic, various resources, including personal protective equipment (PPE), are required to protect people and healthcare workers from getting infected. Due to the high demand and limited supply chain, countries experience a shortage in PPE products. This global crisis imposes a decline in the international trade of PPE supplies. In fact, most governments implement a localization strategy motivating domestic manufacturers to pivot their operations to respond to PPE demands. An oligopolistic market cannot reach the socially optimal coverage without government subsidies. On the other hand, the government subsidy pays the proportion of production costs to reach the socially optimal coverage, while the government's budget is limited. Therefore, the government collaborates with manufacturers via procurement contracts to increase the supply of PPE products. We propose the first supply chain model of PPE products that investigates manufacturer costs and government expenditure. We consider how different behavioral aspects of manufacturers and government can self-organize towards a system optimum. Additionally, we integrate the consumer surplus, producer surplus, and societal surplus into the game model to maximize social benefit. A cost-sharing contract under the system optimum between government and manufacturers is designed to increase the production of PPEs and hence, helps in reducing the number of infected individuals. We conducted our computational study on real data generated from the mask usage during the Covid-19 pandemic in Los Angeles (LA) County to respond to the reported PPE shortage. Under the socially optimal strategy, the PPE coverage increases by up to 33%, and the number of infected individuals reduces by up to 30% compared to other strategies.
ABSTRACT
Purpose: Given the scarcity of data during the early stages of the COVID-19 pandemic in China, the decision-making for non-pharmaceutical policies was mostly based on insufficient evidence. The purpose of this study is to assess the effectiveness of these policies, such as lockdown and government subsidies, on rural households and identify policy implications for China and other countries in dealing with pandemics. Design/methodology/approach: The authors survey 2,408 rural households by telephone from 101 counties across 17 provinces in China during the first stage of the pandemic (March 2020). The authors use the ordered probit model and linear regression model to study the overall impact of policies and then use the quantile regression model and sub-sample regression method to study the heterogeneity of the effects of government policies. Findings: The authors find that logistics disruption due to lockdown negatively affected rural households. Obstructed logistics is associated with a more significant loss for high-income households, while its impact on the loss expectation of low-income households is more severe. Breeding and other industries such as transport and sales suffer more from logistics than cultivation. The impact of logistics on intensive agricultural entities is more serious than that on professional farms. The government subsidy is more effective at reducing loss for low-income households. Lockdown and government subsidies have shown heterogeneous impacts on rural households. Practical implications: The overall economic losses experienced by rural households in the early stages of the pandemic are controllable. The government policies of logistics and subsidies should target specific groups. Originality/value: The authors evaluate the economic impacts of lockdown and government subsidies on rural households and show their heterogeneity among different groups. The authors further demonstrate the policy effectiveness in supporting rural households during the early stages of the pandemic and provide future policy guidance on major public health event. © 2022, Emerald Publishing Limited.
ABSTRACT
From the perspective of multiple insurance subjects, this article studies the purchase of COVID-19 business interruption insurance under the government's direct subsidy model and the indirect subsidy model, so as to provide decision support for the collaborative management and control of interruption risks in the supply chain. Research conclusions are as follows: The COVID-19 business interruption insurance can effectively transfer the enterprise interruption risk, and when the manufacturer purchases insurance or joint (manufacturer and seller) purchase insurance, the effect of interruption risk transfer is better than when the seller purchases insurance;The risk transfer effect of the COVID-19 business interruption insurance mainly depends on the three key influencing factors of the interruption penalty coefficient, the government subsidy model and the premium rate. The combined effect of the three factors has caused changes in the decision boundary of the COVID-19 business interruption insurance purchase decision. As a result, joint purchase under the indirect subsidy model, joint purchase under the direct subsidy model, and manufacturer purchase under the direct subsidy model may all become the optimal purchase decision;The value realization and value appreciation paths of the COVID-19 business interruption insurance under different purchasers are different. © 2022 Systems Engineering Society of China. All rights reserved.
ABSTRACT
Driven by globalization, the COVID-19 outbreak has severely impacted global transport and logistics systems. To better cope with this globalization crisis, the Belt and Road Initiative (BRI)-based on the concept of cooperation-is more important than ever in the post-pandemic era. Taking the BRI as the background, we design an intermodal hub-and-spoke network to provide reference for governments along BRI routes to improve their cross-border transportation system and promote economic recovery. In the context of the BRI, local governments at different nodes have incentives to subsidize hub construction and/or rail transportation to boost economic development. We consider co-opetition behavior among different levels of government caused by subsidies in this intermodal hub location problem, which we call the intermodal hub location problem based on government subsidies. We establish a two-stage mixed-integer programming model. In the first stage, local governments provide subsidies, then the central government decides the number and location of hubs. In the second stage, freight carriers choose the optimal route to transport the goods. To solve the model, we design an optimization method combining a population-based algorithm using contest theory. The results show that rail subsidies are positively correlated with construction subsidies but are not necessarily related to the choice of hubs. Compared with monomodal transportation, intermodal transportation can reduce costs more effectively when there are not too many hubs and the cost of different modes of transportation varies greatly. The influences of local government competition and hub construction investment on network design and government subsidies are further examined.
ABSTRACT
Multinational firms can outsource to contract manufacturers in low-labor-cost regions. However, in recent years, several developed countries and regions have subsidized their local manufacturers (LM[s], she) to encourage reshoring for external benefit (e.g., creating more domestic jobs or improving industrial structure), especially after the COVID-19 pandemic started. This paper investigates the sourcing problem of an LM with brand premium in the presence of government subsidy and differences in labor costs. An LM faces three options: producing in-house, outsourcing to an original brand manufacturer (OBM, he), which sells competitive substitutes without brand premium, or outsourcing to a non-competing contract manufacturer (NCM). We find that, first, the LM chooses reshoring if the external benefit or brand premium is sufficiently high. Second, if the LM decides to outsource, she chooses the OBM (NCM) if her brand premium is high (low). Third, the government prefers to subsidize LM reshoring or outsourcing to an NCM. If the government intends to induce LM to reshore, the subsidy should be at a moderate level. Interestingly, when the LM has a low brand premium but chooses outsourcing, the government still subsidizes her to improve her competitiveness.
ABSTRACT
Under the COVID-19 pandemic, governments worldwide have subsidized manufacturers or consumers on the production or purchase of masks. However, the impacts of these subsidies on the mask supply chain (MSC) operations are unclear. Motivated by our interview with a mask manufacturer as well as the observed real-world practices, we establish consumer utility-based stylized models to analytically examine government subsidies and policies in the MSC. We utilize the infection transmission model to capture the social health risk during the COVID-19 outbreak. The government aims to maximize social welfare, which includes the manufacturer's profit, consumer surplus, social health risk, and government subsidy expenditure. Results indicate that when the price is not controlled (i.e., the manufacturer decides it), the manufacturer and consumer subsidy programs are equally efficient in enhancing consumer surplus as well as reducing harm to social health risk under COVID-19. Thus, the government can conduct a subsidy scheme that is easier to implement in practice. However, we surprisingly find that the government's excessive intervention will cause disequilibrium in the MSC. When the price or the manufacturer's dishonest behavior is fully controlled by the government, subsidizing the MSC is not always advisable. Besides, our findings are consistent with the public interest theory;that is, the proper implementation of dishonesty prevention and pricing control policies can improve social welfare but sacrifice consumer surplus. Our results contribute to healthcare operations management and generate managerial insights for MSC management during COVID-19 with industrial validation.
ABSTRACT
Purpose Given the scarcity of data during the early stages of the COVID-19 pandemic in China, the decision-making for non-pharmaceutical policies was mostly based on insufficient evidence. The purpose of this study is to assess the effectiveness of these policies, such as lockdown and government subsidies, on rural households and identify policy implications for China and other countries in dealing with pandemics. Design/methodology/approach The authors survey 2,408 rural households by telephone from 101 counties across 17 provinces in China during the first stage of the pandemic (March 2020). The authors use the ordered probit model and linear regression model to study the overall impact of policies and then use the quantile regression model and sub-sample regression method to study the heterogeneity of the effects of government policies. Findings The authors find that logistics disruption due to lockdown negatively affected rural households. Obstructed logistics is associated with a more significant loss for high-income households, while its impact on the loss expectation of low-income households is more severe. Breeding and other industries such as transport and sales suffer more from logistics than cultivation. The impact of logistics on intensive agricultural entities is more serious than that on professional farms. The government subsidy is more effective at reducing loss for low-income households. Lockdown and government subsidies have shown heterogeneous impacts on rural households. Practical implications The overall economic losses experienced by rural households in the early stages of the pandemic are controllable. The government policies of logistics and subsidies should target specific groups. Originality/value The authors evaluate the economic impacts of lockdown and government subsidies on rural households and show their heterogeneity among different groups. The authors further demonstrate the policy effectiveness in supporting rural households during the early stages of the pandemic and provide future policy guidance on major public health event.
ABSTRACT
The spread of the COVID-19 pandemic has caused severe damage to the Chinese cruise market since 2020. It is crucial for the local government to reformulate the subsidy policy to respond to the changing environment. We propose a cruise supply chain system to investigate the choice of subsidy recipients and the setting of optimal subsidy levels with a budget-constrained government during the access restriction period and post-epidemic period. We find that in both periods, as long as the subsidy achieves the optimal level, either the cruise lines, the travel agency, or the passengers as recipients of the subsidy policy can maximize the market demand and recover the cruise market after the COVID-19 outbreak. However, as the budget increases, subsidizing passengers can improve the "low price dilemma" of the Chinese cruise market. Compared with the access restriction period, the local government should adjust the subsidy level in the post-epidemic period. Interestingly, the subsidy policy does not always positively impact the international cruise line's profit in the post-epidemic period.
ABSTRACT
Shipping emissions, especially those in port areas, have become one of the main concerns of the maritime industry. Shore power has been recognized as a promising way to alleviate the problem. However, shore power has not been extensively adopted in China. Therefore, from the government’s point of view, this paper conducts a case study of the shore power deployment problem based on the real container shipping network of China, including the Port of Hong Kong. In addition to the basic case, we, also, conduct numerical experiments with different budgets, to analyze its influence on the optimal subsidy plan and cost–benefit analysis. The results give two useful managerial insights: (i) it might be unnecessary to spend a large amount of the budget on subsidization, and (ii) the subsidy expenditure needs to be considered together with the final bunker reduction, while creating the budget.
ABSTRACT
COVID-19 has an impact on the global supply chain, which is mainly manifested in the simultaneous interruption of production capacity and demand. To explore the impact of government subsidy strategies on recovery in the context of supply chain interruption, the low-demand products during the epidemic were used as the research object, and the government's choice of subsidies for production capacity and demand interruption as a recovery strategy. The cumulative profit of supply chain members was taken as the recovery index, and system dynamics was used to construct the "manufacturer-distribution center" secondary supply chain. The changes in cumulative profits for different subsidy options were simulate under partial and complete interruption scenarios. The simulation results showed that the choice of government subsidy strategies under different interruption scenarios had different effects on the supply chain recovery effect. In the scenario of partial demand interruption, government subsidies for manufacturers with interrupted production capacity would make the supply chain recovery better. In the scenario of complete demand interruption, government subsidies for distribution centers with interrupted demand would make the supply chain recovery better. © 2022, Editorial Department of CIMS. All right reserved.
ABSTRACT
The outbreak of the COVID-19 pandemic poses great challenges to the current government subsidy models in the renewable energy sector for recovering in the post-pandemic economy. Although, many subsidy models have been applied to accelerate renewable energy investment decisions. However, it is important to develop a new model to ensure the sustainability of the renewable energy supply network under disruptions on both the supply and demand sides due to hazardous events. This study investigates different subsidy models (renewable credit, supplier subsidy, and retailer subsidy) to find a win-win subsidy model for sustainable energy supply under disruption risks. The objective is to determine the optimal capacity of renewable energy added to the grid, the optimal wholesale price of the power plant, and the optimal retail price of the aggregator under different subsidy models to maximize the economic, social, and environmental benefits of the whole network. A novel scenario-based robust fuzzy optimization approach is proposed to capture the uncertainties of business-as-usual operations (e.g., some relevant costs and demand) and hazardous events (e.g., COVID-19 pandemic). The proposed model is tested in a case study of the Vietnamese energy market. The results show that for a high negative impact level of hazardous events on the supply side, the renewable credit and supplier subsidy models should be considered to recovery the renewable energy market. Further, the proposed approach has a better performance in improving the power plant's robust profit for most of the hazard scenarios than the robust optimization model.