We consider a bilateral supply chain with a downstream manufacturer and an upstream farmer. The manufacturer makes two sourcing decisions: Whether to join the fair trade movement and whether to use organic or conventional (non-organic) cotton in her product. The manufacturer’s sourcing strategy affects the determination of the wholesale price, the farmer’s production cost, and consumers’ purchasing decisions. We characterize the supply chain parties’ subgame perfect Nash equilibrium decisions, finding that the manufacturer participates in fair trade or uses organic cotton only when the non-organic cotton commodity price is sufficiently high. Moreover, increases in the cotton commodity price may not necessarily benefit the farmer. Finally, the manufacturer’s participation in fair trade can yield the highest profit for both supply chain parties. Such a win–win outcome always occurs when the fair trade manufacturer also chooses organic cotton but never occurs if the manufacturer does not participate in fair trade.

中文翻译：

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制造商的负责任采购策略：有机还是参与公平贸易？

我们考虑具有下游制造商和上游农民的双边供应链。制造商做出两个采购决定：是否加入公平贸易运动以及是否在其产品中使用有机或传统（非有机）棉花。制造商的采购策略影响批发价格的确定、农民的生产成本和消费者的购买决策。我们刻画了供应链各方的子博弈完美纳什均衡决策，发现只有当非有机棉商品价格足够高时，制造商才会参与公平贸易或使用有机棉。此外，棉花商品价格的上涨不一定有利于农民。最后，制造商参与公平贸易可以为供应链双方带来最高的利润。