Optimal decisions in a closed-loop supply chain under different policies of government intervention

Abstract

The importance of a closed-loop supply chain (CLSC) emission reduction management is highlighted, because of the intensifying pressure of warming and natural resource shortages. It explores the influence of different policies of government intervention on the optimal decisions of CLSC. It is considered that the market demand is affected by three kinds of effort (reducing carbon emission effort, recycling effort input and advertising effort). Moreover, four different scenarios are constructed, namely without government intervention scenario, government sharing the manufacturer’s reducing carbon emissions effort cost scenario, government sharing the manufacturer’s recycling effort cost scenario and government sharing the retailer’s advertising effort cost scenario. Their optimal decisions are obtained based on Stackelberg game. The results show that the sharing the retailer’s advertising effort cost is easier for the government to adopt. The enterprise obtains a win–win situation in the government sharing the retailer’s advertising effort cost scenario.