LAUSR

Abstract Sustainable supply chains are the developmental trend for economics. They require governments and enterprises to have strong abilities to face and deal with extensive, complicated and long-term problems to optimize multiple targets. This work enriches the content of product sustainability and constructs decision models of the focal company and supplier using four different strategies in the differential game with respect to the three pillars of sustainability. Then, it analyzes the effects of subsidies and the focal company's incentives. The results show that the profit sharing ratio is powerful, and it is positively related to the product sustainability and profits of each member. Subsidies have higher significant effects on the improvements in product sustainability, environmental performance, and the profits of each member and the holistic supply chain than incentives.