A GAME THEORETIC APPROACH FOR PRICING AND ENERGY CONSUMPTION IN A SUPPLY CHAIN WITH ENVIRONMENTALLY SENSITIVE CUSTOMERS

In recent years, competition has grown stronger due to technological advances. Market members need to be careful and decide to remain competitive by using scientific tools. One of the important decisions of manufacturers in the competitive market is to decide on how much their products are compatible with the environment. One of the most important aspects of environmental compatibility is energy consumption and pollution. With the rapid growth of the industry, the number of energy-consuming devices in the world is increasing day by day. These devices made life easier for humans; however, excessive energy consumption of these products has caused serious damage to the environment, and the consequences of these damages have made the general public more sensitive to environmental issues. An effective factor in reducing energy consumption improves the energy efficiency of consumer products. Increasing the energy efficiency of products that use fossil fuels will directly reduce greenhouse gas emissions and air pollution. For this reason, this paper considered a supply chain consisting of two manufacturers. Each manufacturer produces a product that consumes a certain amount of energy when used to perform a specific task. It is assumed that manufacturers can reduce the energy consumption of their products by upgrading their production technology. The purpose of this study is to analyze the behavior of these manufacturers in a competitive environment and answer the question of how much manufacturers need to spend on improving energy consumption and how to determine the price of the final product when consumers are sensitive to the cost of energy and environmental issues. The results show that, by increasing customers' public awareness concerning environmental issues, manufacturers must reduce the energy consumption of their products. Another result shows that the increased price of a unit of energy can make manufacturers increase the energy efficiency of their products.