Coordination of a Socially Responsible Supply Chain with Cause Marketing Campaigns

This paper explores the coordination problem of a socially responsible supply chain, in which the supplier contributes corporate social responsibility by donating a specific amount of money to a cause marketing and the retailer cares for consumer surplus in addition to its own profit. We consider two donation formats: absolute amount donation and percentage of profit donation. For each donation format, the optimal solutions for the centralized and decentralized decisions are derived, and the effects of system parameters on the optimal decisions and other outcome variables are investigated. Moreover, a two-part tariff contract and a quantity discount plus cost sharing contract are proposed to coordinate the socially responsible supply chain. This study may provide theoretical support and operational procedures for supply chain managers to integrate corporate social responsibility into business routines.