Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1023489 | Transportation Research Part E: Logistics and Transportation Review | 2013 | 12 Pages |
•Explore the impacts of carbon footprint tax on fashion quick response (QR) sourcing system.•How to use carbon footprint tax to entice local sourcing under QR in fashion.•Investigate both the single-ordering and dual-ordering QR systems.•Develop analytical conditions to yield mean-risk improvement for the local sourcing option.
Quick response (QR) system is a well-established industrial practice in fashion apparel. It aims at enhancing inventory management by reducing lead time. In addition to employing a faster delivery mode, QR can be achieved by local sourcing (instead of offshore sourcing). This paper analytically studies how a properly designed carbon footprint taxation scheme can be imposed on a QR system to enhance environmental sustainability via employing a local manufacturer by offsetting the probable higher total logistics and production costs. By examining both the single-ordering and the dual-ordering QR systems, we illustrate how the carbon footprint taxation scheme affects the optimal choice of sourcing decision. Our analytical findings reveal that a properly designed carbon footprint taxation scheme by governing body not only can successfully entice the fashion retailer to source from a local manufacturer, but it can also lead to a lower level of risk for the fashion retailer. A mean-risk improving scenario hence results and it provides a significant incentive to convince the fashion retailer to support the idea of joining QR when the carbon footprint tax is in place.