E-closed-loop Supply Chain Decision Model Considering Service Level Input

Abstract

This paper studied the decision-making of the E-closed-loop supply chain (E-CLSC) which is composed of the manufacturer, the retail e-commerce and consumers. Based on Stackelberg game and Nash game, we proposed centralized and decentralized decision-making models and considered three market structures in the decentralized system. First, this paper confirmed that the centralized decision model can maximize system profit, and in decentralized system, the market oriented by the manufacture is more beneficial for higher profits achieved for the system and this is also a market structure that consumer’s favorite. In addition, based on the profit loss of supply chain members in decentralized decision model, we proposed a profit coordination mechanism. Second, we find that market leaders always obtain more profits from recycling and remanufacturing activities, and the highest waste product recycling rate can be achieved when retail e-commerce acts as a leader. Finally, based on the comparison of market demand in different market structures, we find that consumers no longer only pay attention to product prices in the E-CLSC, but also concerned about service levels, and are willing to pay higher prices in order to obtain better service.