Dynamic corporate social responsibility adjustment strategies of a closed-loop supply chain with fairness concerns and supply chain financing

Abstract

Taking corporate social responsibility (CSR) behavior into account, this paper investigated the equilibrium strategies for a dyadic closed-loop supply chain (CLSC) consisting of one manufacturer, one fairness-concerned retailer and one capital-constrained recycler in the static and dynamic frameworks, respectively. Based on the operational practice, both supply chain financing and fairness concerns issues are incorporated into the CLSC. The static decision-making model is firstly built to study the optimal single-period strategies. Then, according to the bounded rationality rule the dynamic decision-making model for the CLSC members is established and described as a discrete dynamic system. We examine the complex dynamics it admits, such as period-doubling bifurcation, chaotic phenomena and the parameter basins by means of applying the nonlinear theory and numerical simulations, and observe the dynamical model experiences more complex behavior than the static scenario. Furthermore, the periodic, bifurcation or chaotic changes and largest lyapunov exponent (LLE) in the wholesale price, retail price, CSR level and return rate are presented, respectively. Besides, the profit (utility) of the manufacturer, the retailer and the recycler are discussed. It is found that both the fairness-concerned parameter and the interest rate in trade credit financing have impacts on the dynamic decision-makings, such as the local stable, bifurcations and the route to the chaotic state etc. In addition, it is obvious that the adjustment speeds of the members have influences on system stability and profit (utility). Finally, some suggestions to CLSC management are also provided.