Profit Of Closed-loop Supply Chain Research Articles

Pricing, greening, and recycling decisions of capital-constrained closed-loop supply chain with government subsidies under financing strategies

BackgroundDue to the growing awareness of environmental protection and their economic benefits, there has been rapid development in the closed-loop supply chain (CLSC) in recent years, with a general occurrence of CLSCs led by collectors. MotivationEven with government support such as subsidies, the operation of CLSC still requires immense investment, such as purchasing recycling equipment. Nevertheless, the unprecedented economic recession during the post-pandemic era has heightened the risk of insufficient funding for CLSC. This highlights the importance of understanding the complexities involved in CLSC financing strategies, as they are crucial for ensuring the sustainability and resilience of CLSC in the face of challenges. MethodsTo investigate the equilibrium decisions and financing strategy selection of CLSCs, we developed and analyzed a series of three-stage Stackelberg models, considering practical scenarios involving capital constraints, environmentally friendly green activities, government subsidies for End-of-Life (EOL) recycling, as well as introducing common trade credit financing and bank financing for generality. ConclusionThe findings demonstrate: (1) Under trade credit financing, it is always beneficial for the collector granting credit. Interest income can motivate the collector to recover more EOL products. (2) In addition to financing interest rates, government subsidies and remanufacturing cost savings can affect the financing strategy selection of the capital-constrained manufacturer. Our study provides guidance for managers in selecting optimal financing strategies under specific conditions. (3) The total profit of CLSC under trade credit financing is always higher and we propose a revenue-sharing contract to realize the win-win status with the optimal profit of CLSC. (4) Furthermore, our results underscore the importance of government recycling subsidies, remanufacturing cost savings, and the positive impact achieved by reducing recycling difficulties and enhancing customer awareness of green consumption.

Power battery closed-loop supply chain decision of green investment under different subsidy objects

The ideal closed-loop supply chain (CLSC) for power battery recycling is "production - transaction - recycling - echelon utilization - remanufacturing". For the purpose of boosting the utilization efficiency of power battery, this paper constructs two models on the echelon utilization of power battery to influence of the government subsidies to the power battery manufacturer or the recycler on CLSC. We focus on exploring the influence of the retailer's green investment in logistics and the sharing costs of manufacturer on the equilibrium results and profits of CLSC. The results show that when the power battery manufacturer's sharing coefficient is maintained in a low range, the investment level of green logistics can be promoted and the profit maximization of the CLSC can be achieved, which has a positive effect on the establishment of a good corporate image and the increase of demand. Furthermore, the power battery manufacturer ought to choose reasonable sharing coefficient to the positive effect of cost sharing on CLSC. In addition to increasing the number of used batteries to be recycled, government subsidies can also enhance the recycled efficiency of power batteries.

Optimal financing strategy in a closed-loop supply chain for construction machinery remanufacturing with emissions abatement

<p style='text-indent:20px;'>Motivated by the remanufacturing practice of construction machinery, this paper examines the impacts of different cooperation financing and carbon emission reduction (CER) strategies on the operational decisions in a closed-loop supply chain (CLSC) where the original equipment manufacturer (OEM) produces only new products and the capital-constraint retailer produces remanufactured products and sells both new and remanufactured products to consumers. Based on the cooperation level between the OEM and the retailer, four different financing strategies, including the non-cooperation financing (NCF), the supply chain carbon financing (SCCF), the partial cooperation with delay-in-payment financing (PCD), and the full-cooperation financing (FC), are explored. Meanwhile, we extend the proposed models by considering the CER strategy implemented by the OEM, and then investigate its impact on the optimal operational and financing decisions of the retailer. The results show that: i) Under different financing strategies, the CER strategy has no impact on the retail price of remanufactured products, but can help increase the market share of new products and strengthen the market value effect for the OEM. ii) Compared with the scenario without CER, the SCCF strategy can not only ease funding pressure than the NCF strategy for the retailer but also increase the CLSC profit under the CER strategy. iii) No matter which financing strategy is adopted, the CER strategy always has a squeezing effect on the market size of remanufactured products, i.e., the cannibalization effect. iv) The CER strategy is not conducive to the development of the remanufacturing industry, but can improve the environmental performance in terms of reducing emissions and increasing the market sales for new products.</p>

Competitive sustainable processes and pricing decisions in omnichannel closed-up supply chains under different channel power structures

In recent years, omnichannel retailing and remanufacturing issues have rapidly emerged in the closed-loop supply chain (CLSC). The omnichannel is a combination of online and in-store retailing, and it affects supply chain relationships and channel power structures by changing value creation processes. It allows consumers a hybrid shopping experience where they can order products online and pick them up in the store or test in-store and buy online (TSBO). Despite this practice, no studies exist on CLSC considering omnichannel retailing under different channel power structures. We investigate the TSBO retailing strategy and its impact on CLSC profit considering price competition between manufacturer and remanufacturer under Manufacturer Stackelberg (MS), Retailer Stackelberg (RS), Vertical Nash (VN), and cooperation (CO) models game settings. In this paper, mathematical models are developed to drive the optimal solution. A two-part tariff coordination mechanism (i.e., IS model) is also used to integrate all supply chain members. The proposed models examine the environmental and social welfare benefits of adopting green innovation products and remanufacturing processes in omnichannel retailing. A numerical study is carried out to illustrate the proposed models' application. The results show that the IS model can synchronize the economic, environmental, and social aspects leading to significant increases in performance. Total supply chain profit under the CO model is the highest. The manufacturer and remanufacturer generate higher profits in the MS model, whereas the retailer makes higher profits in the RS and VN models. When a manufacturer only wants to increase profit with green processes and is not concerned about omnichannel processes, more resources must be allocated for green innovation.

The Impact of Government Dual Policy on the Selection of OEM’s Regulatory Strategy for Third-Party Remanufacturing

Remanufacturing plays an important role in the circular economy and environmental protection. In the development of the remanufacturing closed-loop supply chain (CLSC), the impact of government policy cannot be ignored. However, previous studies have rarely answered the impact of government dual policy (the policy combination of trade-old-for-remanufactured and carbon tax policy) on the optimal decisions of CLSC enterprises. To fill the gap, this work considers the remanufacturing modes and government dual policy simultaneously and investigates a CLSC of waste of electronic and electrical equipment (WEEE) consisting of an original equipment manufacturer (OEM) and a third-party remanufacturer (TPR). Here the OEM has three strategies for regulating third-party remanufacturing activities: outsourcing (Model O), authorization (Model A), and nonregulation (Model D). The results show that: (i) Whether the government implements the dual policy or not, Model O is the best choice for OEM. And compared with nongovernment policy intervention, government dual policy can improve the recovery rate of WEEE products and then effectively promote the recycling of waste resources; (ii) When the government dual policy parameters meet a certain condition, the dual policy could effectively increase supply chain members’ profits and the total profits of CLSC and boost market demand expansion; (iii) Compared with the other two remanufacturing modes, the CLSC under nonregulation strategy is the optimal remanufacturing mode for the whole society; meanwhile, OEM nonregulation strategy is the worst strategy for the environmental protection. In addition, when the government sets appropriate parameters, government dual policy is beneficial to the consumer, supply chain member, and the society simultaneously, but the impact of the dual policy on the environment is also related to the ratio of the two products’ impact on the environment.

Collection decisions and coordination in a closed-loop supply chain under recovery price and service competition

<p style='text-indent:20px;'>With the increasing growth of consumers' request for recovery channels, in addition to collecting price, the collecting service has gradually become a competitive point for collectors to collect used products. Focusing on a closed-loop supply chain (CLSC) with recovery competition (on collecting price and collecting service) and distinguishing collecting quality, we propose two models (decentralized and centralized models) to study the collection strategies and profits of the CLSC. Moreover, we analyze the impact of the collecting competition and quality on the CLSC. Finally, a revenue-cost sharing contract (RCSC) is introduced to coordinate the supply chain. And a numerical example is illustrated to verify the contract's efficiency. It is found that the collected quantities and profits of the CLSC members are positively correlated with the remanufacturable ratio. The collecting competition dampens consumers' enthusiasm for recycling, which is not conducive to collectors to carry out collecting activity, resulting in the reduction of the CLSC's profit. The collectors appropriately improving collecting prices and service levels can increase the collected quantities, but to cope with the increasing competition, increasing collecting price is the main means for collectors to attract consumers to recycle. In addition, the designed RCSC can effectively improve the CLSC's efficiency and increase the profits of each party.</p>

Multi-product and multi-period closed loop supply chain network design under take-back legislation

This paper addresses the closed loop supply chain (CLSC) network design problem for durable products with consideration of take-back legislation. Each returned end-of-life product can be dismantled into different components. A recovery option is adopted for each component based on its quality level, its economic value, and its environmental impact. First, a multi-product multi-period mixed integer linear programming (MIP) model is proposed while assuming a 100% recovery target. The latter is then extended in order to incorporate other take-back legislations: namely, regulation based on other recovery targets and regulation based on reward-penalty (RP) mechanisms. Sensitivity analysis is then carried out in order to capture how some model parameters influence the take-back decision, the integration of the reverse supply chain, and its structure when there are no regulatory restrictions on the take-back of returns. In addition, the CLSC performance, in terms of environment and economic efficiency, is investigated under different take-back legislations. For the considered case study, a comparative study shows that a higher reverse service level and CLSC profit can be achieved when a regulation based on RP mechanism is implemented.

The Pricing Strategy of Dual Recycling Channels for Power Batteries of New Energy Vehicles under Government Subsidies

The vigorous development of the new energy automobile industry has highlighted the issue of efficient recycling of power batteries. Using a Stackelberg game, the pricing mechanism of dual-channel power battery recycling models under different government subsidies is investigated. Consequently, sensitivity analysis and comparison analysis are conducted, providing the pricing decision and the optimal profit of closed-loop supply chain (CLSC) systems. Finally, the effects of recycling efforts, power battery greenness levels, service levels, and consumer green recycling awareness on prices of power batteries and profits are determined through numerical simulations, and the optimal prices under different strategies are compared. The results indicate that recycling prices of each party in the manufacturer subsidy model are relatively high, and consumers’ green awareness and the green levels of power batteries are directly proportional to the recycling prices offered by recycling parties. Automobile 4S stores and recycling networks should pay attention to the balance between the increase in the cost and the quantity of government subsidies for their recycling efforts. For recycling enterprises, maintaining an appropriate service level can maximize their profits and positively motivate the development of them.

Coordination of Closed-Loop Supply Chain with Dual-Source Supply and Low-Carbon Concern

Considering the impact of dual-source supply and low-carbon manufacturing on a closed-loop supply chain (CLSC) system, this article constructs a CLSC model with two competitive dominant upstream suppliers and one following a downstream (re-)manufacturer, then coordinates supply chain through cost-sharing contract. Based on the industrial case in the area of power battery, we analyze the optimal strategies under competition, cooperation, and coordination structures separately and then investigate the influences of emission reduction effort and collection efficiency on supply chain performance. The results reveal that collection of used products can positively affect the (re-)manufacturer’s profit but has opposite impact on the new component supplier. Besides, recycling is beneficial to both low-carbon consumers’ utility and social welfare, but hurts the total profit of CLSC because of the high investment cost of collection. Therefore, the paper designs a cost-sharing contract, which is of applicability and efficiency for both economic and environmental development. Furthermore, it can also increase the profit of CLSC up to cooperation case and improve each member’s profit, eliminating double marginal effect and achieving supply chain coordination.

An Integrated Decision Making Model for Supplier Selection and Network Optimization

Increase in product flow to manufacturers due to government regulations and customers' environmental awareness has required an effective product recovery network design which known as the closed loop supply chain (CLSC). An effective CSLC management needs strategic decision-making regarding supplier selection and order allocations beside network design. Therefore, this paper aims to optimize supplier selection, order allocation and CLSC network configuration, simultaneously. In this study, a CLSC network managing by a company that includes manufacturer, distributer, retailer, collection and recovery centers is examined. This research proposes an integrated approach to select the best suppliers using AHP and COPRAS methods and optimize CLSC network configuration. It is modeled as a mixed-integer linear programming model that maximize total profit of CLSC and importance weights of suppliers.

Reward-penalty mechanism in a closed-loop supply chain with sequential manufacturers' price competition

This paper examines reward-penalty mechanism (RPM) for a closed-loop supply chain (CLSC) with two sequential competing manufacturers. Game theoretic models are developed to investigate both cases: no RPM in the CLSC, and RPM with government is implemented in the CLSC. Equilibrium Nash solutions are obtained and the conditions under which RPM is effective are investigated. Results indicate that: (i) RPM lowers the wholesale price and the retail price, while it boosts the sales quantity, profits of the manufacturers, the retailer, and the total profit of CLSC as well as the collection rate. (ii) The collection rate of the follower manufacturer enhances with the incremental substitute coefficient, whereas it does not have effect on the leader manufacturer. (iii) All participants in the CLSC will make ever-increasing profits only when products' substitute coefficient is lower than certain values. Additionally, RPM keeps the market competitive order since it protects the wholesale price of the leader's market leading status.

Development of closed–loop supply chain network in terms of corporate social responsibility

Due to the rise in awareness of environmental issues and the depletion of virgin resources, many firms have attempted to increase the sustainability of their activities. One efficient way to elevate sustainability is the consideration of corporate social responsibility (CSR) by designing a closed loop supply chain (CLSC). This paper has developed a mathematical model to increase corporate social responsibility in terms of job creation. Moreover the model, in addition to increasing total CLSC profit, provides a range of strategic decision solutions for decision makers to select a best action plan for a CLSC. A proposed multi-objective mixed-integer linear programming (MILP) model was solved with non-dominated sorting genetic algorithm II (NSGA-II). Fuzzy set theory was employed to select the best compromise solution from the Pareto-optimal solutions. A numerical example was used to validate the potential application of the proposed model. The results highlight the effect of CSR in the design of CLSC.

Profit Analysis and Supply Chain Planning Model for Closed-Loop Supply Chain in Fashion Industry

In recent decades, due to market growth and use of synthetic fiber, the fashion industry faces a rapid increase of CO2 emission throughout the production cycle and raises environmental issues in recovery processing. This study proposes a closed-loop supply chain (CLSC) structure in fashion industry and develops its planning model as multi-objective mixed integer linear programming to find an optimal trade-off between CLSC profit and CO2 emission. The planning model is associated with the profit analysis of each member in CLSC to find the optimal price of products on CLSC network. The model determines optimal production, transportation, and inventory quantities on CLSC network. The proposed models are validated using numerical experiments and sensitivity analyses, and from the results some managerial insights are addressed.

Multi-objective optimization of closed-loop supply chains in uncertain environment

Abstract This paper reveals the main features of establishing a closed loop supply chain (CLSC) including recovery processes. We examine the problem through product recovery chain regarding the consumer sourced product returns, end-of-use products and end-of-life products. After defining general CLSC network including customers, collection points, reverse centers, plants, recovery facilities and distribution centers, we propose a multiple objective optimization model regarding three recovery options; material recovery, component recovery and product recovery. In this context, we deduce three level goal formulations; maximizing satisfaction level of trade, maximizing satisfaction degrees of customers, and finally maximizing total CLSC profit function. The objective of the proposed model is to seek the optimal number and location(s) of these CLSC facilities and determine the optimal transportation quantities, production quantities, purchasing quantities. Ultimately, the model is applied to an illustrative case and concluding remarks are made regarding the results.