Optimal pricing and sourcing strategies in a symbiotic supply chain under supply uncertainty

Abstract

Uncertainty around the amount of recycled material is common in symbiotic supply chains. However, there are few studies in the field of operational decision-making that focus on this uncertainty. Considering the uncertainty and supply-side competition in a symbiotic supply chain, this paper focuses on decision-making among symbiotic supply chain stakeholders. We derive the analytical forms of the equilibrium solution for order quantities and the wholesale prices of recycled materials. By comparing different decisions, we obtain the conditions for various degrees of symbiosis. In general, a partial symbiosis mode is incurred when the effective purchase cost of recycled materials is higher than that of raw materials. Otherwise, a complete symbiosis mode occurred. Furthermore, the research results show that the decisions of all stakeholders in the symbiotic supply chain are influenced by a union of internal and external enterprise factors. In the partial symbiosis model, the decisions of all parties are influenced by a combination of technical and market factors, while in the complete symbiosis model, the decision-making of all parties is influenced only by a threshold formed by the above factors. In addition, the impact exerted by government policies (subsidies or taxes) on the symbiotic supply chain is studied through numerical experiments. The results of these experiments show that infrastructure subsidies are effective in certain scenarios. In some cases, the waste extraction cost subsidy is effective, while in other cases, the waste disposal tax increases the waste utilized.