Abstract
This study establishs a dual channel closed-loop supply chain (CLSC) model under a government–penalty mechanism (RPM) consisting a dual-channel manufacturer, a retailer, and the government. We consider a Stackelberg game between the manufacturer and the retailer, and the government rewards or punishes manufacturers on the basis of the collection rate of used products. This paper analyzes the influence of government RPM on the optimal decisions, the relationship between the two sales channels, and the total social welfare of the supply chain system. We find that the government RPM can improve the stability of the dual-channel supply chain and the collection rate of the used products. Moreover, we are the first to provide a method of deriving the optimal government RPM through a numerical example.
Highlights
In the last decade, resource shortages and environmental problems have received more and more attention in both academia and industry
The first stream is about dual-channel supply chains, the second one is about closed-loop supply chain (CLSC) management, and the last one is about the impact of governmental financial intervention on the decisions of CLSC supply chains
In order to analyze the consumer surplus, we develop a numerical example with the data in Table 2, which describes the relationship between m, the intensity of the government reward-penalty mechanism (RPM), and consumer surplus
Summary
Resource shortages and environmental problems have received more and more attention in both academia and industry. China issued the Waste Electrical and Electronic Equipment Recycling Management Regulation in 2011, forcing manufacturers to collect used products actively. These polices are all penalty-based, which means that manufacturers will be penalized if they fail to achieve the recycling or reuse targets set by governments. Apple has established a dual-channel closed-loop supply chain to sell new products and collect used ones through online and offline stores. Due to the prevalence of dual-channel closed-loop supply chains, it is worth investigating the effects of policies in this new setting.
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