Closed-loop Supply Chain Model Research Articles

Recycling, pricing decisions, and coordination in the dual-channel closed-loop supply chain: A dynamic perspective

As the “Internet+” mode promotes transforming and upgrading the traditional recycling industry, dual-channel recycling has become the focus of commercial activities. Based on such background, this paper constructs the differential game models of the dual-channel closed-loop supply chain (DCCLSC) system in the complete non-cooperation (DN), incomplete cooperation (D), and complete cooperation (C) scenarios by applying game theory. The novelty is that recycling and pricing decision problems are investigated for the DCCLSC system from a dynamic perspective. A cost sharing-transfer payment contract is designed to realize the perfect coordination of the DCCLSC system. Moreover, the extended models with government intervention and inventory management are proposed. Finally, the numerical examples are used to verify the feasibility and validity of the addressed results. The results show that 1) online retail price is higher than offline retail price when μ>μN; 2) The retail price in the DN model is always lower than the D model, and their comparative relationship with the C model is closely related to the ratio of recoverability rate; 3) The recoverability rate and the profit of DCCLSC system are highest in the C model; 4) Competition and government intervention can create a win-win situation with improving environmental and economic benefits.

Closed-loop Supply Chain Model Analysis of Home Appliances based on Promotional Effort and Recycling Effort

Nowadays, a large number of home appliances have entered the node of renewal, if they can be properly disposed of and utilised, used home appliances can also be converted into renewable resources to achieve the economic cycle, and at the same time, green living and circular economy are increasingly accepted by the public. Recycling of used home appliances has both economic and social benefits. At the same time, promotional efforts invested in the market for home appliances have an obvious effect on increasing their market demand. Therefore, it is necessary to study the closed-loop supply chain of home appliances based on promotion and recycling efforts. In this paper, we use literature analysis, mathematical analysis and Stackelberg game analysis to construct a closed-loop supply chain model for home appliances based on promotional and recycling efforts after determining who is the promoter among manufacturers and retailers, and then compare and analyse the decisions and benefits of the supply chain members, taking into account their centralised and decentralised decision-making. The results of this paper show that: (1) when home appliance manufacturers, retailers and third-party recyclers of used home appliances make decentralised decisions, there is a double marginal effect, i.e., the supply chain members only consider their own benefits while ignoring the benefits of the supply chain as a whole, which results in the failure of this closed-loop supply chain system of home appliances to be coordinated. (2) When the retailer's promotional effort is greater, both the retail price and the retailer's profit are lower. (3) The greater the recycling effort of the third-party recycler of used home appliance products, the higher its recycling price, i.e., the consequent increase in recycling costs, leading to a decrease in its profit.

Creating a Sustainable Closed-Loop Supply Chain: An Incentive-Based Contract with Third-Party E-Waste Collector

This paper proposes a closed-loop supply chain model to study the impact of product returns and awareness program on e-waste supply chain. The study focuses on the sustainability aspects of e-waste management and the effects such initiatives bring about to the environment at large. Reusing and recycling of collected products in manufacturing will improve the supply of scarce resources and reduce reliance on virgin raw materials. Engaging in CLSC can enhance brand reputation and competitiveness through sustainability while reducing the health risks to informal recycling workers by formalizing practices. The proposed model consists of a manufacturer, retailer, and third-party collector (TPC) under wholesale price and incentive contracts with deterministic demand. From the analysis it is observed that integrating a third-party collector with higher recycling rate boosts the total profit of the decentralized setting with a TPC. The centralized model, with a single decision maker, results in lower retail prices and higher collection rates compared to the decentralized models thereby commanding a higher overall profit.

Optimizing City-Scale Demolition Waste Supply Chain Under Different Carbon Policies.

In order to establish a green, low-carbon circular development economic system, imperative goals include achieving carbon peaking and carbon neutrality. This research delves into the resource utilization of city-scale demolition waste (C&DW), aligning with environmental protection needs and sustainable development principles. The paper introduces a unique closed-loop supply chain (CLSC) model tailored for C&DW and employs a distinctive mixed integer nonlinear programming (MINLP) model for optimization. Guangzhou serves as a case study for thorough analysis, verification, and practical application of the proposed model, especially under diverse scenarios of carbon price (CP) and carbon trading (CT) policies. The key conclusions drawn from this study include the following: (1) The cost of carbon emissions is intricately influenced by both carbon emissions and carbon price, with the latter effectively regulating the carbon emissions during C&DW recycling. (2) The implementation of a CT policy, with a fixed carbon price, contributes to a further reduction in the cost of C&DW recycling treatment. (3) Under equivalent conditions, the CT policy demonstrates the potential to decrease costs and enhance the economic benefits within the building environmental protection product market. The research outcomes not only contribute to the advancement of management theory in the C&DW recycling supply chain (SC) but also provide a robust theoretical foundation for governmental initiatives aimed at introducing effective C&DW recycling management policies.

Is it practical to uphold both resilience and sustainability of supply chains using closed-loop supply chain models considering circular economy? An empirical investigation from Kenya

Is it practical to uphold both resilience and sustainability of supply chains using closed-loop supply chain models considering circular economy? An empirical investigation from Kenya

Manufacturer’s cooperation strategies of closed-loop supply chain considering recycling advertising

Online recycling shows great potential to significantly boost recoverable quantity and attract advertising investment. This study focuses on exploring how retail and recycling advertising affects the manufacturer’s cooperation strategy in a closed-loop supply chain (CLSC). The CLSC model consisting of a manufacturer, an online recycling platform with recycling advertising, and a retailer with retail advertising considers four cooperation strategies by a manufacturer: no cooperation, cooperation with only the retailer, cooperation with only the online recycling platform, and cooperation with the online recycling platform and the retailer. After comparing four strategies, it is found that the manufacturer collaborates with the retailer, or the online recycling platform based on retail and recycling advertising coefficients. Furthermore, cooperation between the manufacturer and the retailer increases retail advertising and sales, which incentivizes the manufacturer to collaborate with the retailer. Collaboration between the manufacturer and the online recycling platform will increase both recycling advertising and quantity, which incentivizes the manufacturer to collaborate with the online recycling platform. These results would encourage more manufacturers to improve their operational efficiency through cooperation with online recycling platforms because the online recycling platforms conveniently utilize recycling advertising to increase the quantity of used products recycled, which in turn contributes to environmental sustainability.

A multi-period multi-objective closed-loop blood supply chain configuration and optimisation under disruption

The COVID-19 pandemic has highlighted the stability of the blood supply chain in case of interruption and other emergencies. Blood is a precious and perishable substance, and any disruption in its supply can cause serious consequences. Current research on the blood supply chain mostly focuses on a multi-objective perspective, and rarely involves both multi-objective and multi-period methods simultaneously. Therefore, we develop a multi-period multi-objective closed-loop blood supply chain model that considers disruptions and uncertainties of demand and recovery, aiming at achieving a balance among various objectives, and coordination of various periods. Fuzzy chance-constraint, meta-heuristic approaches and exact solution (CLPEX) are adopted to mitigate the impact of uncertainties and calculate the optimal solution of a calculating case. The calculation outcomes indicate that: With regard to economic costs and social benefit, the multi-period system is better than the single-period system; the comprehensive performance of the multi-target system is better than that of the single-target system; and the multi-period multi-objective system is more in line with the real situation. Meanwhile, the mitigation strategies, such as maintaining emergency inventory and implementing lateral transshipment, can significantly enhance the performance of the system in disruptions. This paper mainly contributes the follows: Firstly, it provides a reference for configuration and optimisation of a cross-region closed-loop supply chain under disruptions and uncertainties. Secondly, the comprehensive trade-off of multi-objective and multi-period in this paper is especially suitable for perishable production with short cycles, large fluctuations of supply and demand.

Does blockchain technology need to be introduced in the closed-loop supply chain based on product lifecycle management?

Resource wastage, prevalent in all industries, hinders sustainable economic and social development. Inspired by the application of blockchain technology in product traceability, we find that government investment in blockchain technology platforms (BTP) can facilitate the recycling of waste products. We develop a closed-loop supply chain (CLSC) model consisting of a single manufacturer and a single retailer, examining the impact of BTP on the CLSC and its potential benefits to the government. The results show that BTP increases retail prices and market demand within the CLSC but has a non-monotonic impact on wholesale prices. Interestingly, we find that even when the BTP unit cost is moderate, BTP can still enhance CLSC profits if the recycling rate falls below a certain threshold. Furthermore, in scenarios with a high service elasticity coefficient, CLSC can leverage BTP to boost profits, even when the unit usage cost is substantial. Under specific conditions, timely investments in BTP can augment social welfare for the government. Notably, government investment in BTP becomes imperative when the recycling rate is relatively low, and the environmental burden is significant. Finally, this paper explores the conditions conducive to collaborative implementation of BTP by the government and CLSC, providing a valuable reference for their effective BTP implementation.

Decision making in fuzzy closed loop dual channel supply chain

This paper discusses the optimal pricing and collecting decisions in a fuzzy environment of the three closed-loop dual-channel supply chain models where a manufacturer produces the original product from fresh materials and unfashionable products. The manufacturer sells the original products to the customers using direct and retail channels (forward dual channel). In the reverse channel, the manufacturer, third-party collector and retailer individually take responsibility for unfashionable products acquired from the market in the three models. Remanufacturing cost, product collecting cost and market demand are treated as fuzzy variables. The optimal decisions wholesale price, direct price, retail price and collection rate are derived using fuzzy set theory and game theory approach in the three decision models. Finally, numerical illustrations clarify the impact of the fuzzy degree parameters on the decision variables and the expected profits of the players. It is found that the manufacturer decision model is superior for receiving the maximum expected profits of the players and also being more convenient from the customer?s perspective.

Pricing Decisions for Power Battery Closed-Loop Supply Chains with Low-Carbon Input by Echelon Utilization Enterprises

Today, with the number of waste power batteries and consumers’ awareness of low-carbon both increasing, a new closed-loop supply chain model in which the node enterprises of reverse supply chains are being constructed. These are responsible for the recycling, echelon utilization and low-carbon innovation of waste power batteries. This provides a new way for the development of reverse supply chain node enterprises and lays a theoretical foundation. In this paper, we use the backward solution method to solve the Nash equilibrium solution of the Stackelberg game. Through numerical calculation and simulation, the decision variables, profit and income of the supply chain are analyzed and the equilibrium results are compared. The experimental results indicate that the implementation of low-carbon innovative production by cascaded utilization enterprises is conducive to the growth of their profits with lower cost inputs. The impact of the initial waste power battery recycling rate on the decision variables is negative, while, for the supply chain as a whole, the profit growth of the node companies can be positive and the location of the inflection point appears to be particularly important. The sensitivity coefficient of low-carbonization levels has a positive regulatory effect on decision variables and location of all parties. The closed-loop supply chain model proposed in this study promotes the overall development of a power battery closed-loop supply chain, and also provides theoretical guidance for reasonable pricing decisions of node enterprises under the new model. Based on the results of this paper, the government can implement incentives such as subsidies, or formulate reasonable policies for the development of a power battery closed-loop supply chain.

Competition or cooperation? Exploring the impact of dominant modes on the competitive relationship in CLSC

PurposeThe paper proposes a two-level closed-loop supply chain (CLSC) dynamic competitive model based on different competitive cooperation situations, and explores the impact of competitive cooperation methods on the pricing strategies, recycling and remanufacturing strategies and competitive model selection strategies of supply chain firms.Design/methodology/approachThis paper establishes a CLSC game consisting of a manufacturer and two retailers. Firstly, five CLSC models are established in both horizontal and vertical dimensions, each of which competes with one another. Secondly, the recycling and remanufacturing pricing strategies are analyzed under different competition or cooperation models. Finally, the results are verified through numerical analysis.FindingsThe overall profitability of the CLSC is highest when the manufacturer–retailer partnership alliance is in place. The relationship between retailers and manufacturers is also found to be the best way to achieve overall optimization of the CLSC.Originality/valueThe paper investigates the relationship between the competitive partnership and the total profit of the CLSC, taking into account how to optimize the overall benefit, and focusing on how to optimize the individual interests of each participating enterprise. The results can provide basis and guidance for managers' pricing decision and competition cooperation.

Green consideration in a closed-loop supply chain model with imperfect inspection under learning impact

This study investigates a multi-echelon closed-loop supply chain model integrating learning impact with a single producer, single retailer, and single collector. Retail pricing, green innovation, and marketing efforts are assumed to have a linear relationship with end-user demand. The return of rejected goods occurs at random and is subject to an imperfect inspection procedure that is vulnerable to two different types of classification error. An S-shaped learning curve is considered to soothe the inspection process which is subject to inaccuracy. Numerical examples are used to illustrate the implications of the suggested model in order to achieve a goal that benefits both the consignor and the consignee. It is investigated whether the learning effect can outweigh the loss even when the inspection error has a detrimental effect on supply chain earnings. To identify the crucial parameters that can spark some truly exceptional managerial ideas, a sensitivity analysis is carried out.

A Spatial Equilibrium Problem for the European Pulp and Paper Industry Under the Emission Trading System

AbstractWe propose a spatial equilibrium problem for a pulp and paper supply chain network under the Emission Trading System (ETS) and the circular economy principles. The developed closed-loop supply chain model, based on the variational inequality theory, accounts for the forest deployment and the production of paper using both virgin pulp and recyclable paper waste in an area that is subject to the ETS. In addition, it considers the exchanges of virgin pulp, paper, recyclable and not-recyclable paper waste between this regulated area and geographical zones where no environmental policies apply. The aim of this paper is to investigate the ETS impacts on the pulp and paper industries located in an environmentally regulated area in terms of operating costs, production and trading volumes of the aforementioned commodities, and emissions generated. The case study focuses on the European pulp and paper companies, which are among the energy-intensive industries deemed to be exposed to the carbon leakage risk as a consequence of the ETS application. Sensitivity analyses on the carbon price value and on the trade flexibility are conducted. Our results show that the ETS implies additional costs for the European pulp and paper companies and induces them to resort more on imports of virgin pulp and paper from not-regulated zones.

Analysis of Green Closed-Loop Supply Chain Efficiency under Generalized Stochastic Petri Nets

In this paper, we aim to explore the operational performance of a green closed-loop supply chain under random events. A green closed-loop supply chain model based on generalized stochastic Petri nets (GSPN) is built using the Petri nets theory. According to the isomorphic relationship between GSPN and continuous-time Markov chains, the relevant Markov model is converted from GSPN, and the steady-state probability of the model is then calculated. Finally, the model is analyzed from the aspects of time performance and operation efficiency of each link. Compared to previous studies, this paper finds that: when the whole green closed-loop supply chain system reaches a dynamic equilibrium state, the product has a steady-state probability at all stages, and thus the overall operational performance of the system can be obtained; compared with the recycling of waste products, the green product takes a longer time in the production and distribution stages; since marketing, packaging processing, market feedback, and market demand formulation account for a high level of utilization throughout the life cycle of green products, decision makers need to focus on the supervision and management of these links. Managers of green closed-loop supply chain systems need to adjust their decision-making strategies in a timely manner according to the performance level of the system in the steady state to realize the efficient operation of the system. This paper not only provides theoretical support for the improvement of the operational efficiency of green closed-loop supply chain system, but also provides new ideas for the research of green closed-loop supply chain operation mode.

Pricing and Coordinating the Lease-Oriented Closed-Loop Supply Chain for Construction Machinery in the Era of Carbon Tax

Promoting sustainable production and consumption practices in the construction machinery industry is crucial for achieving energy savings and reducing carbon emissions. However, there is a lack of targeted studies addressing the challenge of scaling up leasing and recycling while maximizing economic benefits for enterprises. To fill this gap, this paper presents a lease-oriented closed-loop supply chain model that incorporates a carbon tax policy to investigate the impact of the carbon tax rate and consumer preferences for remanufactured products on the supply chain and introduces a leasing compensation–cost apportioning combined contract to achieve supply chain coordination in the construction machinery sector. The model considers differential selling and leasing prices for new and remanufactured products, as well as the recovery rate, under both centralized and decentralized decision-making approaches. The study explores the interrelationships between various parameters through sensitivity analysis and numerical simulation. The results demonstrate that within a certain range of the cost apportioning proportional coefficient and leasing compensation proportional coefficient, the combined contract can lead the supply chain to achieve Pareto optimality. As the carbon tax rate increases, it was observed that the profits for all parties in the supply chain tend to decrease. However, due to the increased demand for remanufactured products, the product recovery rate improves, resulting in a reduction in total carbon emissions in the closed-loop supply chain of construction machinery. Moreover, the profits of all parties and the total supply chain profits initially decrease and then increase with an increasing preference coefficient for remanufactured products among consumers. By leveraging these factors and adopting effective strategies, such as enhancing consumer recognition of remanufactured products and optimizing pricing and cost allocation, it is indeed possible for the profits of all parties and the total profits in the supply chain to surpass the initial values, even in the face of increasing carbon tax rates. This demonstrates the potential for aligning sustainability objectives with economic benefits in the construction machinery industry.

Pricing and quality improvement strategies in a closed-loop supply chain with dual collection channel

This paper presents two-period closed-loop supply chain (CLSC) models considering demand with and without replacement sales. A manufacturer produces a new product using raw materials in the first period, and the manufacturer and a third party compete to collect used products in the second period. Further, the manufacturer produces an improved version of the new product using raw materials and returned-used products in the second period. The product is sold through a retailer in both periods. We propose a two-period Stackelberg game with the manufacturer as a leader to investigate the product’s pricing strategy and quality improvement level. It is shown that the quality improvement level improves with an increase in the sensitivity of return to the competitor’s acquisition price but deteriorates with an increase in sensitivity of return to the collector’s acquisition price. Finally, we implement a cross-shareholding coordination mechanism and observe an improvement in the quality level and profits of the manufacturer and the retailer.

Pricing and Coordination for the Leasing and Recycling of Construction Machinery in a Supply Chain Based on Industrial Internet Platform

Leasing and recycling are important methods for developing the low-carbon sustainability of the construction machinery industry. However, there are some dilemmas caused by the extreme limitations of product service life. There has been little research on construction machinery leasing thus far and a lack of description of its unique characteristics in previous models. Focusing on the problem of pricing and coordination, a two-stage model of a leasing closed-loop supply chain based on the practical application of an Industrial Internet platform was proposed. Under centralized and decentralized decision-making scenarios, the prices of leasing and selling, maintenance effort, and recovery rate were calculated, respectively. By using the Shapley value method to optimize the selling price, and the two-part pricing contract to calculate the compensation fee, global profits can be reasonably distributed, while the supply chain can be improved. The effects of different contracts on the improvement of supply chain profit were investigated. Additionally, the correlation among parameters was explored via sensitivity analysis and numerical simulation. The findings show that the maintenance and recycling of construction machinery can be improved by using an Industrial Internet platform while achieving supply chain coordination via contracts. The enhancement of maintenance effort can decrease remanufacturing costs, which are positively correlated with the selling price and leasing price of products, further promoting the recovery rate of used products. The findings of this paper show that manufacturers can take advantage of the Industrial Internet platform to improve recycling efficiency as well as to decrease product prices and remanufacturing costs by promoting remanufacturing technologies. On the other hand, leasers need to enhance the maintenance of construction machinery. Strengthening cooperation via contracts can jointly promote leasing and recycling in the construction machinery industry and help achieve low-carbon sustainable development.

Pricing and greening decisions of a government-subsidised dual-channel closed-loop green supply chain model with price-dependent collection rate

ABSTRACT Online shopping has become increasingly popular among customers due to the availability and easy accessibility of electronic devices. Hence, a manufacturer would like to open an online platform with his traditional retail channel. Government subsidies are endogenised in a research joint venture based on recent observations. Here, government subsidies are assumed to increase the production of eco-friendly products to be much more environmental friendly. The retailer and third-party collector collect used products from the customer and return them to the manufacturer for recycling. Demand rates are modelled as linear functions of selling prices and the level of green innovation. The collection rates are considered linear functions of collecting fees and the level of green innovation. The study investigates three decentralised models under three scenarios and the centralised model. A sensitivity analysis is composed to study the effects of the essential parameters. Critical managerial insights have been provided, which is beneficial for the supply chain members. If the cost co-efficient of green innovation can be reduced, then the optimal level of green innovation and the members' profits increase. Again the governmental subsidy is directly proportional to the level of green innovation and the manufacturer's profit.

A customized multi-neighborhood search algorithm using the tabu list for a sustainable closed-loop supply chain network under uncertainty

Environmental pollution and social inequalities have prompted the agricultural industry to implement sustainable supply chain management practices. However, supply chain operations and planning in developing countries such as Iran are often not economically, environmentally, and socially sustainable. To address this challenge, this paper presents a practical optimization model for sustainable closed-loop supply chain (SCLSC) management in the agricultural industry of Iran, with a focus on the olive crop. Based on the triple bottom line concept, which considers economic, environmental, and social sustainability, the proposed model makes location, allocation, and inventory decisions under uncertainty by developing a scenario-based robust optimization model. To solve this complex network design problem, we propose a metaheuristic algorithm with a multi-neighborhood procedure that efficiently handles the complexity of the problem. Specifically, we develop a customized Simulated Annealing (SA) algorithm using a tabu list to improve the initial solution found by a constructive heuristic algorithm. Our extensive analysis and comparison of our metaheuristic algorithm against the exact solver and two other powerful metaheuristic algorithms demonstrate the applicability of our SCLSC model for the agricultural industry in Iran and the high performance of the proposed metaheuristic algorithm for solving large-scale networks.

Optimal Decision-Making of Closed-Loop Supply Chains in E-Commerce Platform Considering Sales Cooperations under Environmental Effects and WEEE Regulations.

Nowadays, to achieve carbon neutrality, e-commerce platforms participate in the sales and recycling of electrical and electronic products in consideration of waste electrical and electronic equipment (WEEE) regulations and environmental effects. This study builds a Stackelberg game model for an e-commerce closed-loop supply chain (ECLSC) under different sales cooperation modes between a manufacturer of electrical and electronic products and an e-commerce platform. Reverse induction is used to obtain the optimal decision-making and profit of the ECLSC under three sales cooperation modes, considering the influence of environmental effects on optimal decision and objective functions. The results show the following: the sales cooperation mode and environmental cost do not affect the WEEE recovery prices of manufacturers and e-commerce platforms, nor do they affect government subsidy standards for dismantling WEEEs; they are, however, positively correlated with environmental benefits. Furthermore, the wholesale and retail prices of electrical and electronic products under different sales cooperation modes are related to sales cooperation modes and environmental costs. Moreover, the processing fees imposed on the manufacturers are related to the environmental costs of the electrical and electronic products; the thresholds of environmental costs of products for government to levy processing fees are different under different sales cooperation modes. Finally, the environmental cost of products required by the government's levying of processing fees are the lowest under a hybrid model. Generally speaking, under WEEE regulations, governments should levy more processing fees for electrical and electronic products with higher environmental costs. Meanwhile, increased environmental benefits will always increase the profits of supply chain members, but increased environmental costs do not always reduce the profits of supply chain members, and multichannel product sales do not always generate profits for manufacturers.