The impact of government intervention in competitive electronic closed-loop supply chain to support internal industry

Abstract

Due to the development of various industries, including electronic products industries, waste management of these products in order to reduce serious damages into the environment has been considered by human societies. On the other hand, due to the fact that a high percentage of the waste of these products have capability to use for production of new products, the management of these chains is more important to reduce production costs and consequently reduction the damage on the environment. There are competitive chains in which a variety of internal products are produced by a chain that competes with products produced by another chain abroad. In the proposed mathematical model, in addition to considering the waste management of these types of products, the government tries to intervene in a way that supports internal chain. Therefore, the first purpose of this study is to answer how waste management in the competitive chain (especially electronic products) and the second purpose is to answer how the government intervenes in this type of competitive chain to support domestic industry. These two cases will be examined by presenting a mathematical model. Due to the competitive demand function for both supply chains, the importance of pricing and quality determination is particularly evident. Optimal decision variables that impact on the demand functions are concluded by Stackelberg game using manufacturers leadership without and under government intervention. Numerical examples indicate reduction on using fresh raw materials for internal manufacturer and subsequently, reduction purchasing cost of fresh raw materials by government intervention. This leads to a reduction in production costs for the internal manufacturer, which in a way has led to a boom in the internal industry. Furthermore, government intervention leads to reduce in price of products for customers. Finally, in order to extract some management concepts, several sensitivity analyzes are performed on the main parameters.