Abstract
In this paper, a closed-loop supply chain (CLSC) consisting of one manufacturer and one supplier is considered. The capacity of the manufacturer is limited, the manufacturer can increase capacity by investing in capacity, and there are different cooperation contracts among the supply chain members. This paper pushes collecting activities upstream, assumes that the collecting activity can be completed by the supplier, and accepts that there is cooperation between the members, which increases supplier involvement. Dynamic game models among CLSC members are formulated. The optimal decisions of pricing, capacity investment, and collecting channels of the CLSC members are obtained, and the impacts of some important factors, for example, the capacity investment cost coefficient and the cost-sharing factors, on optimal decisions are investigated. The results reveal that the supplier collecting mode performs better in some scenarios; therefore, the management enlightenment desired by the supplier can be obtained. Additionally, the coordination between the manufacturer and the supplier sometimes fails to increase the closed-loop supply chain’s sustainability, which is a finding quite different from some current research results.
Highlights
With the accelerated industrialization and urbanization, the contradiction between economic development and resources and environment is becoming more and more prominent, which has become one prominent problem limiting China’s sustainable development.Collecting and remanufacturing of recyclable resources is an important means to alleviate this problem
Adding collecting activities to the original forward flow of the supply chain constitutes a closed-loop supply chain (CLSC) system that has been popularly studied in recent years, while the reverse flow brought by the collection and reuse of products to the product supply chain makes full use of resources, which can largely alleviate the problem of resource shortage and contribute to environmental protection efforts
If the quantity of remanufactured products is regarded as an evaluation indicator of the sustainability of the CLSC, under the manufacturer collecting model, regardless of how high the unit cost is, no cost sharing is better than the scenario of considering cost sharing; in the supplier collecting model, it is better to consider a single cost sharing contract; in all scenarios, when the manufacturer collects and does not consider the coordination contract, the investment in remanufacturing is the largest
Summary
With the accelerated industrialization and urbanization, the contradiction between economic development and resources and environment is becoming more and more prominent, which has become one prominent problem limiting China’s sustainable development. In the existing research on the problem of CLSC collecting channel, no scholars have considered the capacity constraint and capacity investment decision of manufacturers’ manufacturing/remanufacturing activities. Capacity investment behavior affects manufacturers’ manufacturing and remanufacturing activities, which in turn has an impact on collection decisions, and determines the sustainability and environmental benefits of the CLSC. In order to make the model more realistic, this study adds conditional constraints to the decision problem regarding collecting channels in the closed-loop supply chain, setting an upper limit on the manufacturer’s manufacturing and remanufacturing capacity, and adding a new decision variable, the amount of capacity investment, to achieve higher revenue and environmental benefits in the CLSC. This paper is the first study of capacity investment, collecting channels and pricing decisions in CLSC considering capacity constraints and two-way coordination contracts.
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