A Two-Echelon Supply Chain with a Two-Warehouse Retailer and a Green Manufacturer under Advertising and Product Expiry-Dependent Demand

This study aims to develop a sustainable and coordinated supply chain model that addresses increasing environmental concerns and growing consumer demand for green products. The model considers a two-echelon system comprising a green manufacturer and a retailer managing both their own warehouse (OW) and a rented warehouse (RW), with customer demand segmented according to price sensitivity, advertising effectiveness, product greenness, and time-based accessibility. Specifically, demand in the OW segment is modeled as a function of the effective selling price, the retailer’s advertising expenditure, and the greenness level of the product, capturing the preferences of consumers who are more responsive to promotional and environmental attributes. In contrast, the RW demand function incorporates a time-dependent decay factor, reflecting reduced customer interest in products stored for longer durations or in less accessible locations. The supply chain is analyzed using a Stackelberg game-theoretic framework, where the green manufacturer leads by setting the wholesale price, investing in preservation technology and emission control, and determining advance payment terms. The retailer follows by optimizing advertising expenditure and allocating inventory across warehouse segments to serve distinct customer groups. Numerical simulations and sensitivity analyses show that preservation investment, carbon costs, and green subsidies significantly affect profitability and environmental performance. The findings emphasize the importance of segment-specific demand modeling and integrated decision-making in enhancing economic outcomes and sustainability, providing valuable insights for green supply chain coordination and policy development.