Local sourcing and fashion quick response system: The impacts of carbon footprint tax

Research output: Journal article publicationJournal articleAcademic researchpeer-review

143 Citations (Scopus)

Abstract

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.
Original languageEnglish
Pages (from-to)43-54
Number of pages12
JournalTransportation Research Part E: Logistics and Transportation Review
Volume55
DOIs
Publication statusPublished - 1 Jan 2013

Keywords

  • Carbon footprint tax
  • Local sourcing
  • Quick response system
  • Sustainability

ASJC Scopus subject areas

  • Business and International Management
  • Transportation
  • Management Science and Operations Research

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