The optimal product-line design and incentive mechanism in a supply chain with customer environmental awareness

<p style='text-indent:20px;'>Due to the increasing awareness of sustainable development, manufacturer's product-line design gets wide attention. Nowadays, traditional manufacturer that produces non-green products is considering whether introduce upgraded green products. This paper studies optimal quality difference between and Besides, our model also investigates in unit production cost, research development (R&D) investment, market segmentation. The results show that, from perspective, producing a better choice when are low quality. In addition, retailer always inclined sell Further, consumers' preference for divided. And consumer surplus under different designs analysed. Finally, two contracts proposed compared encourage produce products.</p>