Research on the impact of green innovation alliance mode on decision-making of two-cycle closed-loop supply chain

Abstract

Based on the previous researches on closed-loop supply chain (CLSC), this paper takes the life cycle attributes of products into consideration and investigates the situation in which the manufacturer has a tendency to invest in green innovation and establish alliance with other supply chain members. In a two-cycle CLSC consisting of one manufacturer, one retailer and one-third party recycler, Stackelberg game method is adopted to analyze and compare the optimal decisions and profits of CLSC members as well as the efficiency of three green innovation alliance modes. The results show that the impact of difference among those three alliance modes on CLSC decision is obvious, and the operational efficiency of CLSC is always higher than that without alliance. From the perspective of consumers, environmental protection and profits, the green innovation alliance formed by manufacturer and retailer enjoys the lowest price, the highest green innovation level, the highest alliance profit and the relatively high level of resource recycling, which is the best choice for manufacturer. Finally, numerical examples are presented to obtain some conclusions and give some management inspirations intuitively. It is found that the coefficient of profit reduction in the second cycle has a significant impact on the decision-making and profits of the members and entire CLSC, but the positive influence of consumers’ sensitivity to the green innovation of manufacturer is not obvious.