Closed-loop Supply Chain Coordination Research Articles

A Green Closed-Loop Supply Chain Coordination Mechanism Based on Third-Party Recycling

Taking an environment-friendly green closed-loop supply chain as the research object, this work established a two-stage closed-loop supply chain game model. Considering the influence of the environmental protection input on the whole supply chain, there are different decisions among the participants in the supply chain, and the different choices will have impacts on the benefits of the whole supply chain when manufacturers select a closed-loop supply chain model of third-party recycling. Hence, this work compared and analyzed the impact of centralized decision-making and decentralized decision-making on the returns and pricing strategies of each participant. Finally, an optimized cooperative mechanism decision model considering a cost profit sharing contract was further designed. The model is conducive to obtaining the maximum profit value in centralized decision-making and avoids the negative impact of a “double marginal effect” on supply chain income in decentralized decision-making, and finally, improves the overall coordination and profit of a green closed-loop supply chain. The numerical examples are conducted to verify the effectiveness and practicality of the proposed models. This work provides a helpful decision support and guidance for enterprises and the government on the used products recycling decisions to better manage the green closed-loop supply chain.

RETRACTED ARTICLE: Research on closed-loop supply chain coordination control model based on difference equation load model

We, the Editor-in-Chief and Publisher of Journal of Difference Equations and Applications, have retracted the following article: Huiqun Yuan, Kaijun Leng, Ya Bi, Sheng-Hung Chang & Anthony Lam, Research on closed-loop supply chain coordination control model based on difference equation load model, Journal of Difference Equations and Applications, 25:9-10, (2019), 1290-1301, doi:10.1080/10236198.2019.1570172 Since publication, concerns have been raised about the scholarly integrity of the article published in the special issue titled “Special Issue on Iteration Theory and Applications”. It was brought to our attention that one of the co-authors, Anthony Lam, was not based at the institution they claimed (KU Leuven). The authors have stated that the same co-author, Anthony Lam, does not exist. The authors have not provided any information as to why this identity was created. As authorship is central to the integrity of a published article, the Editor-in-Chief and Publisher have therefore decided to retract the article. The authors have been informed of this decision and they agree with this retraction. The journal is committed to correcting the scientific record and will continue to cooperate with any institutional investigations into this matter. We have been informed in our decision-making by our policy on publishing ethics and integrity and COPE guidelines The retracted article will remain online to maintain the scholarly record, but it will be digitally watermarked on each page as ‘Retracted’.

A Coordinated Revenue-Sharing Model for a Sustainable Closed-Loop Supply Chain

This study takes a sustainable closed-loop supply chain composed of one manufacturer and two price-competitive retailers as the object and considers the two-way risk aversion characteristics of manufacturers and retailers in examining the coordination mechanism in a closed-loop supply chain. Using game theory, optimal decision-making on wholesale prices, retail prices, and recycling prices are explored under decentralized and centralized decision-making scenarios, and representative expressions are established. By analyzing the effects of the risk aversion coefficient on players’ optimal strategies, we found that the manufacturer’s and retailers’ risk aversion coefficients have different effects on the wholesale price, retail price, and recycling price under decentralized decision-making, while in a centralized decision-making scenario, the effects are the same. The comparison also found that the wholesale price and recovery price under the centralized decision-making scenario are higher than those under decentralized decision-making. To achieve closed-loop supply chain coordination, we propose a revenue-sharing contract that we demonstrate by coordinating price competition with risk aversion and analyze a range of parameters that influence the revenue-sharing contract. The results show that the proposed contract can increase the profits of supply chain members by identifying the optimal revenue-sharing ratio.

A Study of Revenue-and-expense Sharing Contract of Closed-loop Supply Chain Coordination Based on Heterogeneous Demands

A Study of Revenue-and-expense Sharing Contract of Closed-loop Supply Chain Coordination Based on Heterogeneous Demands

Coordination and pricing decisions in a closed-loop supply chain

This paper investigates coordination and pricing decisions in a closed-loop supply chain (CLSC) with a manufacturer, a remanufacturer, and a retailer. We also consider a supplier who provides both the manufacturer and remanufacturer with new parts. We follow the practice by assuming vertically differentiated new and remanufactured products. We show how the optimal prices and quantities for new and remanufactured products at the retailer level, and the total CLSC profits and the supplier's profits compare with each other across different CLSC coordination structures. We also investigate the sensitivity of our results to the quality of returns and consumers' perceptions. We find that both the CLSC and the supplier enjoy the highest profits from the coordination between the retailer and the manufacturer. Furthermore, we show that the coordination between the retailer and the remanufacturer results in the lowest profits for the CLSC members, but not necessarily the lowest for the supplier.

Recycling Pricing and Coordination of WEEE Dual-Channel Closed-Loop Supply Chain Considering Consumers' Bargaining.

Environmentally friendly handling and efficient recycling of waste electrical on Waste Electrical and Electronic Equipment (WEEE) have grown to be a global social problem. As holders of WEEE, consumers have a significant effect on the recycling process. A consideration of and attention to the influence of consumer behavior in the recycling process can help achieve more effective recycling of WEEE. In this paper, we built a dual-channel closed-loop supply chain model composed of manufacturers, retailers, and network recycling platforms. Based on the influence of customer bargaining behavior, we studied several different scenarios of centralized decision-making, decentralized decision-making, and contract coordination, using the Stackelberg game theory. The results show that retailers and network recycling platforms will reduce the direct recovery prices to maintain their own profit when considering the impact of consumer bargaining behavior, while remanufacturers will improve the transfer payment price for surrendering part of the profit under revenue and the expense sharing contract. Using this contract, we can achieve supply chain coordination and eliminate the effect of consumer bargaining behavior on supply chain performance. It can be viewed from the parameter sensitivity analysis that when we select the appropriate sharing coefficient, the closed-loop supply chain can achieve the same system performance under a centralized decision.

Dynamic Collection Strategy and Coordination of a Remanufacturing Closed-Loop Supply Chain under Uncertainty

This paper aims to investigate the uncertainty factors that impact the collection strategy of a remanufacturing closed-loop supply chain. The basis of this type of supply chain is the collection of used products, without which the remanufacturing of new products would be out of the question. In this paper, we considered the effect of stochastic disturbance on the collection process in a closed-loop supply chain consisting of a manufacturer and a retailer, in which the manufacturer is responsible for collecting the used products. Considering stochastic disturbance, in this research, we proposed a stochastic collection model, and derived the feedback control strategies for both the manufacturer and retailer. Next, we investigated the evolutionary path and probability distribution of the stochastic return rate. Finally, we proposed a contract to coordinate the decentralized closed-loop supply chain. The results showed that the manufacturer would improve the level of return effort as the intensity of stochastic disturbance increases. However, the disturbance would not affect the pricing strategies of the supply chain members. As a result of the stochastic disturbance, the return rate always hovered around the expected return rate, while the expectation and variance of the return rate remained stable from a long-term perspective. The expected value and variance of the return rate could decrease or increase with time, depending on the value of the initial return rate of the system.

Reverse and closed loop supply chain coordination by considering government role

Due to the increasing number of end-of-life (EOL) products and their related environmental concerns, much attention has been paid to reverse logistics. In this paper, we consider a two-echelon reverse supply chain (RSC) with one manufacturer and one retailer who try to improve sustainable consumption by increasing customers’ willingness to return used products through offering a discount or a direct fee in exchange for bringing back EOL products. Afterward, the model is extended to consider a closed loop supply chain (CLSC). Quantity discounts and increasing fee contracts are proposed to coordinate supply chains. Then, government role in improving coordinated supply chains through donating different incentives (tax exemption and subsidy) to supply chain members are analyzed. Results show that total channel profit in the coordinated case is improved. Also, in the proposed models, each member has enough motives to participate in the plan. In addition, results demonstrate that government-sponsored incentives to the manufacturer are preferred to the retailer.

Closed-loop supply chain coordination through incentives with asymmetric information

A closed-loop supply chain seeks to enhance the consumers’ environmental consciousness to increase both the profits and the return of past-sold products. Even though, firms have misaligned interests for closing the loop: while all firms exploit consumers environmental consciousness to increase sales, only manufacturers use it for appropriating of returns’ residual value. Starting from a benchmark (no-incentive) scenario where a manufacturer (M) is the leader and a retailer (R) is the follower, we develop two incentive games through a profit-sharing contract to align firms’ motivations for closing the loop. In both incentive games, the incentive takes the form of a share of profits that M transfers to R. Our question is how the sharing fraction should be determined to make both players economically better-off. The first incentive game assumes that R has no-information on the sharing parameter, which is determined by M after R sets her strategies; thus the incentive has an endogenous nature. In the second incentive game the sharing parameter is common knowledge and both players know its values before the game starts, thus the incentive has an exogenous nature. We find that an endogenous incentive is never more economically and environmentally convenient than a no-incentive game. In contrast, an exogenous incentive can make both players economically better-off inside specific sharing parameter ranges. Nevertheless, when other forces (e.g., competition or legislation) impose the adoption of a profit-sharing contract, M should supply an endogenous incentive when the exogenous share is either too high or too low.

Implications of Innovative Engineering Design on Closed Loop Supply Chain Coordination: Incentives for Input Material Reduction vs. Enhanced Recycling

Motivated by interactions with a major player in the aerospace industry, we consider the relationship between a supplier of specialty material forgings and a buyer that manufactures fabricated airplane components by extensively machining down these forgings as per complex design specifications. Due to high material removal costs, the buyer prefers these forgings to be as similar in geometry and size to the final component as possible, i.e., near-net-shape. The supplier, by default, does not have the capabilities to deliver such near-net-shape forgings as per technological constraints, but can utilize costly effort and/or invest in the required technologies to achieve forging size reduction. By taking into account uncertainty regarding the correspondence between supplier's effort and resulting output (i.e., reduction in forging size), and potential information asymmetry issues due to supplier's private information regarding costly effort, we assess the implications of two innovative approaches our study firm considers for improving supply chain performance: (i) The buyer can partially subsidize the supplier to induce forging size reduction efforts, and/or (ii) the supply chain can facilitate a higher rate recycling of scrap material to reduce input material costs.We find that the supplier's input reduction efforts and enhanced recycling across the supply chain interact in non-intuitive ways, thus inflicting a non-monotone effect on supply chain performance; in other words, an increased recycling rate may misalign incentives, and not reduce decentralization cost. We find that enhanced recycling deteriorates supply chain performance the most especially when the recycling rate is moderate, which suggests that our study firm should participate in a supply chain with either superb or insufficient recycling capabilities. Furthermore, when agency issues arise, we find that the buyer should subsidize supplier's forging size reduction efforts only when the recycling level is above a threshold, which helps improve supply chain performance. In contrast, when the recycling level is below the same threshold, as the buyer bets on the possibility on contracting with an efficient supplier, the buyer withholds any compensation at equilibrium, and thus, enhanced recycling yields a higher decentralization cost.

The Coordination and Optimization of Closed-Loop Supply Chain with Lots of Factors

AbstractConsider a closed-loop supply chain including a manufacturer, a retailer and two third party recyclers as the background. A coordination and optimization model is built by using the downside-risk function, Cournot model and government subsidy excitation function. The effect of risk characteristics, government subsidy and Cournot competition on supply chain is analyzed, and the impact of revenue-and-expense sharing contract is studied in the channel, which shows that the contract cannot coordinate and optimize the closed-loop supply chain. Also, risk sharing contract and expense sharing contract are designed, which can offer the desired downside protection to the retailer, provide more profits to the agents, and accomplish channel coordination and optimization. Moreover, an application example is given for testing the effectiveness and feasibility of the contract, and the bound and rule of the contract parameters are given. Finally, by the analysis of numerical simulation and sensitivity of the model based on the contract, the validity and practicability of the model are verified, and the relationship between government subsidy, risk characteristics, competitive characteristics with the supply chain is obtained. This study provides decision support and decision-making reference for the development of remanufacturing industry.

Coordination of fuzzy closed-loop supply chain with price dependent demand under symmetric and asymmetric information conditions

This paper investigates the coordination issue of a two-echelon fuzzy closed-loop supply chain. Two coordinating models with symmetric and asymmetric information about retailer’s collecting scale parameter are established by using game theory, and the corresponding analytical solutions are obtained. Theoretical analysis and numerical example show that the maximal expected profits of the fuzzy closed-loop supply chain in two coordination situations are equal to that in the centralized decision case and greater than that in the decentralized decision scenario. Furthermore, under asymmetric information contract, the maximal expected profit obtained by the low-collecting-scale-level retailer is higher than that under symmetric information contract.

Closed-loop supply chain coordination strategy for the remanufacture of patented products under competitive demand

In this study, we consider a closed-loop supply chain (CLSC) system comprising an original manufacturer, third-party remanufacturer, and retailer. In this system, the remanufacturer can only recycle and remanufacture the patented products with patent licensing from the original manufacturer, where newly manufactured and remanufactured products are sold together in the same market at different prices, and the demand for the two types of product is sensitive to their retail prices. First, we establish a leader–follower game model and a joint decision-making model, and we compare the performance of the components of the CLSC, i.e., the collection price, selling prices, and profits. Second, we investigate the contract coordination issues among the three parties in the decentralized case, where we develop a coordinated pricing mechanism that incorporates a revenue-and-sharing contract and two-part tariffs, which can perfectly coordinate the CLSC. Thus, a reasonable range can be identified for the sharing coefficient as well as the agency fees for qualifications. Finally, based some numerical examples, we analyze the impact of the salvage value, substitute ratio, coordination parameters, and other factors on the optimal supply chain performance.

A Study of the Closed-Loop Supply Chain Coordination on Waste Glass Bottles Recycling

The recycling of waste products can sharply save manufacturing cost and improve the economic efficiency and corporate-reputation. It also has a great effect on the environment and resources protection. In the management of the closed-loop supply chain, the recycling of waste products and decision-making on pricing often directly affect the supply and demand of products and the operation efficiency of supply chain. Therefore, first we take waste glass bottles as an example and establish a mathematical model to solve the profit of manufacturers and retailers solely. Then, we analyzed whole supply chain profit under a dual-channel recycling condition which is directly recycled by consumers or by retailers. Finally, we concluded that no matter what product’s price, quality, profit, or operational efficiency of supply chain is, the overall recycling is better than the single node recycling model. Based on the analysis, we developed a new model to coordinate the profit of manufacturers and retailers in the supply chain with revenue-sharing contract. A numerical study shows that this approach is applicable and effective.

Dual channel closed-loop supply chain coordination with a reward-driven remanufacturing policy

This paper investigates a reward-driven policy, employed in a closed-loop supply chain (CLSC), for acquiring used products earmarked for remanufacture. Under the examined model, a single manufacturer sells products through a retailer as well as directly to end users in a forward supply chain. In the reverse supply chain, three different modes of collection are employed to capture used products for remanufacture: they are through a third party, directly by the manufacturer and from the retailer. Mathematical models for both non-cooperative and centralised scenarios are developed to characterise the pricing decisions and remanufacturing strategies that indicate individual and overall supply chain performance. Optimality of all the proposed models is examined with theory. To coordinate and achieve a win–win outcome for channel members, we proposed a three-way discount mechanism for the manufacturer. Extended numerical investigation provides insights on ways to manage an efficient reward-driven CLSC in a dual-channel environment.

Prices Contract Model and Information Sharing Platform of Closed-loop Supply Chain Based on Recyclers’ Competition

Closed-loop supply chain has important economic and social benefits. And recyclers' competition is the characteristic that can't be neglected in many closed-loop supply chains. Based on the assumption of independent between the remanufacturing and new product market, this study had constructed a price contract model of closed-loop supply chain based on recyclers' competition and taken a numerical analysis according to the actual data after adjustment of an enterprise. This study had drawn a result that the cost of recyclers has great effect for closed-loop supply chain coordination in a long time. Finally, in the case of the construction machinery industry, this study had discussed the problem of closed-loop supply chain information sharing platform construction in order to reduce cost and control of the whole closed-loop supply chain for the core enterprise. © 2013 Asian Network for Scientific Information.

Research on Contract Coordination and Price Decision of Closed-loop Supply Chain under Disruption Condition

In the course of remanufacturing closed-loop supply chain system in the actual operation,the disrupt event is inevitable,the closed-loop supply chain system how to coordinate events effectively become a hotspot of research.At present,revenue-sharing contract as a coordination mechanism is used widely,and it more to achieve the various members of the closed-loop supply chain profit sharing and risk sharing.Therefore,revenue-sharing contract to coordinate response to disrupt events is considered.To study a closed-loop supply chain system with single manufacturer and single retailer is established under the demand is unlinear function.When market scale,reproduction cost and collection cost are disrupted simultaneously,a Stackelberg game model is established.The optimal strategies of closed-loop supply chain under the centralized decision and decentralized decision are analyzed.Research result showed that the closed-loop supply chain coordination may be broken off by original revenue-sharing contract under a disruption event.The market disruptions exceeded a certain range when disruption even was happened,the original production plan is adjusted and the new revenue-sharing contract should be designed to coordinate the closed-loop supply chain.Finally,a numerical example is given to the conclusions efficiency.