Robust Financing Decisions of Green Supply Chain under Market Risk

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

The authors provide a compelling analysis of how incomplete market demand information influences optimal production decisions and financing strategies within green supply chains. By applying robust optimization techniques to both advance payment financing and bank loan financing models, the study reveals that market risk encourages conservative decision-making among supply chain participants. Notably, the research identifies a critical point where the advance payment discount exceeds a certain threshold of the bank interest rate, making it impossible to determine a universally optimal financing strategy for manufacturers facing market risk.

Comments:

1. Clarification of Contribution: While the manuscript offers a thorough overview of the existing literature, the unique contribution of this study would be more clearly emphasized by distinctly differentiating it from specific prior works. It is recommended that the authors include comparative tables to systematically highlight the differences and novel aspects of their research in relation to the existing literature.

2. Relevance to Consumer Preferences: The manuscript primarily focuses on the effect of incomplete market demand on financing decisions, yet it frequently references consumer green preferences. The relationship between these preferences and the core analysis of financing strategies is not immediately clear. It would be beneficial for the authors to elucidate how consumer preferences are incorporated into the study’s framework and the implications this has for the overall findings.

3. Enhancement of Figures: The data visualization in Figures 2-7 could be further refined to improve clarity and visual appeal. Enhancing the quality of these figures will better convey the key findings and support the narrative of the manuscript.

4. Theoretical Significance: While the theoretical contributions of this study are valuable, they are not fully developed. To enhance the theoretical impact of the paper, the authors should engage more deeply with the existing theories discussed in the literature review. A more detailed comparison of this study’s findings with those of previous research would highlight both similarities and differences, thereby strengthening the manuscript’s contribution to the field.

Conclusion:

Given the relevance of the problem addressed and the study’s potential to make a significant practical contribution to supply chain management, we recommend major revisions to the manuscript before its publication in Sustainability. Addressing the above comments will not only improve the quality of the literature review but also enhance the overall readability and scholarly impact of the paper, ensuring it meets the rigorous standards of the journal.

Comments on the Quality of English Language

Needs to be further polished. 

Author Response

Comments 1: Clarification of Contribution: While the manuscript offers a thorough overview of the existing literature, the unique contribution of this study would be more clearly emphasised by distinctly differentiating it from specific prior works. It is recommended that the authors include comparative tables to systematically highlight the differences and novel aspects of their research in relation to the existing literature.

Response 1: Thank you for the reviewer's insightful comments. We have compared the literature in detail in the Literature Grooming section in the Literature Review subsection added at the end. Due to the limited number of studies addressing both market risk and financing decisions in the context of supply chain innovation, creating a separate table would have resulted in a sparse presentation. Consequently, we have focused on a select number of the most pertinent references in the Literature Review section to effectively highlight our paper's uniqueness.

Comments 2: Relevance to Consumer Preferences: The manuscript primarily focuses on the effect of incomplete market demand on financing decisions, yet it frequently references consumer green preferences. The relationship between these preferences and the core analysis of financing strategies is not immediately clear. It would be beneficial for the authors to elucidate how consumer preferences are incorporated into the study’s framework and the implications this has for the overall findings.

Response 2: Thank you for the reviewers' valuable feedback. This paper investigates the financing decisions within a supply chain in the context of incomplete market demand information. It analyses how market demand risk influences these financing decisions and assesses the conservativeness and robustness of robust optimisation techniques. The level of consumer green preference is used solely as an assumption in our market demand model and is not a primary focus of the discussion or analysis. Consequently, we have removed any examination of the impact of consumer green preference on supply chain decision-making from the paper.

Comments 3: Enhancement of Figures: The data visualization in Figures 2-7 could be further refined to improve clarity and visual appeal. Enhancing the quality of these figures will better convey the key findings and support the narrative of the manuscript.

Response 3: Agreed. Thanks to the reviewer's comments, we have clarified all the diagrams.

Comments 4: Theoretical Significance: While the theoretical contributions of this study are valuable, they are not fully developed. To enhance the theoretical impact of the paper, the authors should engage more deeply with the existing theories discussed in the literature review. A more detailed comparison of this study’s findings with those of previous research would highlight both similarities and differences, thereby strengthening the manuscript’s contribution to the field.

Response 4: Thank you to the reviewers for their insightful comments. The model presented in this paper is primarily based on existing research while incorporating innovative elements. By utilizing robust optimization, we explore how incomplete market demand information affects supply chain innovation decisions under financial constraints, thus providing new insights. Unlike empirical studies that rely on multiple theoretical foundations, this paper focuses on validating the conservatism and value of robust optimization. This approach responds to the findings of key studies, such as those by Gallego and Moon (1993) and Qiu et al. (2022), which are summarized in the Literature Review section. As these studies have already been reviewed in that section, we will not repeat the theoretical review here.

Author Response File: Author Response.pdf

Reviewer 2 Report

Comments and Suggestions for Authors

This study provides a new model to support robust financing decisions by considering incomplete risk associated with market demand information. The paper applies robust optimization methodology to investigate optimal production decisions and financing strategies within green supply chains in both prepayment financing and bank loan financing models. This subject of the study is interesting and the proposed new model enriches green supply chain theory. However, the authors should address the following comments and suggestions:

1. The structure of the paper could be improved. For example, a research methodology section should be added, best put in after the literature review section.

2. The research model of robust financing decisions focuses on a two-echelon green supply chain comprising a solitary manufacturer and a lone retailer. Have the authors considered a multiple-echelon supply chain rather than just a two-echelon one ? Or is there a plan for that in future research?

3.  The paper would benefit from proofreading by a native speaker academic. It appears that the writing of the paper could be improved: for example “uncertain-ty” on line 17th in the abstract, “im-proves” on line 50, “re-sources” on line 75 and “un-certain” on line 93 on page 2, “un-der”. Please check also for grammar, punctuation and spelling errors, and also avoid incomplete sentences.

In my opinion, the topic of paper brings a new contribution to the field of green supply chain. However, I would like to suggest the author(s) considers making some revision for improvement as indicated in the above comments.

3.  The paper would benefit from proofreading by a native speaker academic. It appears that the writing of the paper could be improved: for example “uncertain-ty” on line 17th in the abstract, “im-proves” on line 50, “re-sources” on line 75 and “un-certain” on line 93 on page 2, “un-der”. Please check also for grammar, punctuation and spelling errors, and also avoid incomplete sentences.

In my opinion, the topic of paper is suitable to be published in MDIP as it brings a new contribution to the field of green supply chain. However, I would like to suggest the author(s) considers making some revision for improvement as indicated in the above comments.

Comments on the Quality of English Language

As above comment （bullet 3）

Author Response

Comments 1: The structure of the paper could be improved. For example, a research methodology section should be added, best put in after the literature review section.

Response 1: Thank you to the reviewers for their valuable comments. This paper employs a robust optimization method, and the model constructed is a common Stackelberg model within supply chain management research. Details on the robust optimization method are outlined in the model description and assumptions section, specifically in Assumption 4 on line 274. As the paper adheres to a game theory research paradigm, which is well-established, it does not follow the conventional empirical approach of listing methodologies separately after the literature review. Instead, the research methodology is integrated throughout the model-solving process and is thus described within the model description and assumptions section.

Comments 2: The research model of robust financing decisions focuses on a two-echelon green supply chain comprising a solitary manufacturer and a lone retailer. Have the authors considered a multiple-echelon supply chain rather than just a two-echelon one ? Or is there a plan for that in future research?

Response 2: Thank you to the reviewers for their comments. We did consider incorporating a three-level supply chain into the model. However, the equilibrium solution for this more complex model proved too intricate to analyze and compare effectively. Given the complexity of the three-level supply chain model, it was challenging to derive actionable conclusions. Consequently, we focused on a two-level supply chain system, which provided clearer and more practical insights. We acknowledge the potential value of exploring multi-tiered supply chains and peer competition in future research.

Comments 3: The paper would benefit from proofreading by a native speaker academic. It appears that the writing of the paper could be improved: for example “uncertain-ty” on line 17th in the abstract, “im-proves” on line 50, “re-sources” on line 75 and “un-certain” on line 93 on page 2, “un-der”. Please check also for grammar, punctuation and spelling errors, and also avoid incomplete sentences.

Response 3: Thank you very much for the correction. During the initial writing of the paper, separation issues arose due to the automatic line breaks set by Word for English text. We have carefully reviewed and revised the language issues, and conducted thorough grammar, punctuation, and spell checks to ensure accuracy. At the same time, the main revised paragraphs of the linguistic part of the paper have been marked.

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

Comments and Suggestions for Authors

The authors have significantly improved the quality of this manuscript. The reviewer is satisfied with this revised version.