Game theoretic analysis of a three-stage interconnected forward and reverse supply chain

Abstract

The dynamic economic scenario of today ensures that industrial and environmental policies that contribute to greener supply chain are incorporated. This paper considers an interconnected three-stage forward and reverse supply chain, which provides green products to a green conscious market. The procurement of raw materials is responsible for the first stage of the supply chain; the second manufacturing/remanufacturing process; and the third stage of marketing the products to the consumer. There is one supplier, one manufacturer, and one retailer in the forward supply chain. New raw materials are used in this supply chain, and new products are manufactured and sold. There is also a market for remanufactured products, and in this market, the same retailer also sells remanufactured products. There is one collector, one remanufacturer, and one retailer in the reverse supply chain. From consumers, the collector collects used products, processes and sells the remanufacturable ones to the remanufacturer. If the raw materials supplied by the collector are not adequate to satisfy the demand, the remanufacturer purchases the remainder from the seller. Both the manufacturer and the remanufacturer use green manufacturing processes. Two models, namely centralized model and decentralized model, are formulated. A numerical example is taken to illustrate the two model and perform sensitivity analysis.