Exploring the intervention of intermediary in a green supply chain

In many countries, the contribution of unorganized or micro-retailers to the overall economy and sustainability is a topic of increasing importance. Although these retailers are commonly dependent on the intermediaries for trading, there is scarce literature addressing the influence of intermediaries in green supply chain practice. This study explores the repercussions of a dominant intermediary in a three-echelon green supply chain under price and greening level sensitive demand in both single and two-period setting. The results demonstrates that the manufacturer is able to sell maximum amount of products and the retailer receives higher profits if an intermediary dominates the market. A dominant intermediary can urge the manufacturer to promote products with a lower greening level. In such scenario, the unit R&D investment in producing green products is less, but each participant may receive higher profits. A sequential profit-sharing mechanism is proposed from the perspective of the manufacturer that can be employed under leadership of the wholesaler. Under this mechanism, the retailer can maintain strategic inventory, each member can receive higher profits, and most importantly, the manufacturer can promote products at highest greening level to achieve sustainability goals. If consumer takes into account the GL-price ratio, then two-period procurement planning always outperforms single period optimal decision under manufacturer-Stackelberg game. The insights can assist manufacturers to create a foundation for sustainable business practices.