Green Hydrogen Supply Chain Decision-Making and Contract Optimization Under Uncertainty: A Pessimistic-Based Perspective

To address the issue of excessive pessimism caused by demand and supply uncertainties in the green hydrogen supply chain, this study develops a two-tier green hydrogen supply chain model comprising upstream hydrogen production stations and downstream hydrogen refueling stations. This research work investigates optimal ordering and production strategies under stochastic demand and supply conditions. Additionally, option contracts are introduced to share the risks associated with the stochastic output of green hydrogen. This study shows the following: (1) Under decentralized decision-making, the optimal ordering quantity when the hydrogen refueling station is excessively pessimistic is not necessarily lower than the optimal ordering quantity when it is in a rational state, and hydrogen production stations will only operate when the degree of excessive pessimism is relatively low. (2) The initial option ordering quantity is always larger than the minimum execution quantity under the option contract; higher first-order option prices and lower second-order option prices can help to increase the initial option ordering quantity. (3) The option contract is effective in circumventing the negative impact of excessive pessimism at hydrogen production stations on planned production quantities. This study addresses the gap in the existing research regarding excessively pessimistic behaviors and the application of option contracts within the green hydrogen supply chain, providing both theoretical insights and practical guidance for decision-making optimization. This advancement further promotes the sustainable development of the green hydrogen industry.