Optimizing the sustainable decisions in a multi-echelon closed-loop supply chain of the manufacturing/remanufacturing products with a competitive environment

Abstract

Along with raised public awareness about environmental issues, some supply chains have begun to develop eco-friendly strategies aiming to manufacture and (or) remanufacture green products. This research presents a new preferable gaming structure in a multi-echelon closed-loop supply chain including a manufacturer, a retailer/remanufacturer, and an intermediate collection center (which is a governmental entity). The supply chain is structured to sell the products in a first and a secondary market. The significance of the research ahead is enhanced due to the use of game theory in sustainability in a new competitive supply chain structure. Toward addressing sustainability requirements, emission reductions within manufacturing, remanufacturing, and delivery functions are considered in a two-period game-theoretic-based model. Regarding the customer’s low-carbon preferences in production and delivery, the manufacturer wholesales new products to the retailer, and then, the retailer forwards them to the primary market via a full truckload policy in the first period. Even more striking, considering the environmental commitments in the second period, used products are gathered by the collection center in a reverse flow and sent to the retailer/remanufacturer for remanufacturing processes. In this regard, a Stackelberg, a Nash game, and also a novel bargaining structure are developed in the first and second periods. Then, the resulting decentralized approach is compared with a centralized model, illustrating a better performance of the decentralized scenario. Finally, through numerical analyses, it is observed that there are ascending relations between the triple dimensions of reduction rates (in manufacturing, remanufacturing, and delivering) and the corresponding profits, in which incorporating low-carbon considerations in remanufacturing has a greater efficacy.