A closed-loop power battery supply chain differential game model considering echelon utilization under a cost subsidy

Abstract

PurposeThis study considered the dynamic equilibrium decision-making problem in a three-level supply chain comprising a manufacturer, a recycler and an echelon utilization (EchU) enterprise under the condition of cost-sharing coordination.Design/methodology/approachThis study constructed a differential game model based on cost-sharing coordinated decision-making among a manufacturer, a recycler and an EchU enterprise operating under a cost subsidy. The study determined the optimal equilibrium strategies and evolutionary characteristics of subsidy mechanisms in a closed-loop supply chain. Finally, this study numerically simulated the path evolution process of vehicle battery EchU, the profit of each stakeholder and the sensitivity of parameters and verified the influences of various parameters on the overall structure and path.FindingsThe results show that a cost subsidy policy has a moderating effect on the EchU decision-making process and supply chain profit. The effect of that policy increases over time.Practical implicationsThis study determined the equilibrium decision-making of enterprises in a closed-loop vehicle battery supply chain from a dynamic perspective, as well as the combined effects of government subsidy policies and cost-sharing coordination mechanisms.Social implicationsThe results have important guiding significance for coordination and cooperation between enterprises in closed-loop supply chains, for their decision-making and for the development of government subsidies.Originality/valueThis study considered the effects of government subsidies on closed-loop supply chains and the introduction of an EchU market to a closed-loop vehicle battery supply chain.