Government incentive mechanism of closed-loop supply chain based on information asymmetry

Waste Products ◽

The Government ◽

Aimed at the closed-loop supply chain (CLSC) composed of the manufacturer, the retailer and consumers in the waste products market, this paper studies how the government handles the adverse selection problem on the hidden recovery costs of the retailer and deals with the moral hazard problem on the level of retailer's hidden efforts. A government incentive regulation aiming at maximizing social welfare has been established based on the incentive theory in this paper. A list of contracts with transfer payments is presented to reveal the retailer's collection efficiency and motivate the retailer to make the optimal investment. Further, the impact of related factors on the recovery cost and social welfare level according to the numerical simulation are verified. The results show that under the government regulation, only by reporting the true recovery technology type information to the government can the retailer maximizes the profit. In addition, the retailer with high recovery efficiency can obtain both retained profit and additional information rent. Finally, as the retailer makes efforts to improve the recovery level, it also increases investment cost, which affects the enthusiasm of enhancing the retailer's recovery efficiency. Therefore, the government should not blindly pursue the improvement of recycling efficiency regardless of the cost, but should pay more attention to the control of recycling equipment and technology cost.The results facilitate scientific policy development, and provide a reference for promoting closed-loop supply chain operations.

Closed-loop Supply Chain with Advertising Investment and Reward-Penalty Mechanism Based on Different CSR Sharing Models

E3S Web of Conferences ◽

10.1051/e3sconf/202125702086 ◽

2021 ◽

Vol 257 ◽

pp. 02086

Author(s):

Yi Liu ◽

Yanting Huang

Keyword(s):

Corporate Social Responsibility ◽

Supply Chain ◽

Social Responsibility ◽

Social Welfare ◽

Closed Loop ◽

Waste Products ◽

Investment Level ◽

Corporate Social ◽

This paper considers a closed-loop supply chain (CLSC) consisting of a manufacturer and a retailer based on different corporate social responsibility (CSR) behaviors. In addition, the advertising investment and government’s reward-penalty mechanism (RPM) are also taken in account. To explore the impact of CSR behaviors on supply chain, we developed three models: (1) Only the manufacturer undertakes CSR (model M); (2) only the retailer undertakes CSR (model R); (3) the manufacturer and the retailer share CSR (model MR). By analyzing the results, we found that: (1) The advertising investment level and waste products return rate both increase with the increase of the extent to members undertake CSR when there is only retailer undertakes CSR and when the manufacturer and retailer share CSR, and remain unchanged when there is only the manufacturer undertakes CSR; (2) the overall social welfare increases with the increase of the extent to members undertake CSR no matter which member undertakes CSR, and reaches the highest when there is only the retailer undertakes CSR; (3) it is the most conductive for the performance of the closedloop supply chain when there is only the retailer undertakes CSR.

To be raised up or kicked out? Insights for the recycler in closed-loop supply chain with the regulation of government

RAIRO - Operations Research ◽

10.1051/ro/2021066 ◽

2021 ◽

Author(s):

Xinxin Xu ◽

Qunli Wu

Keyword(s):

Supply Chain ◽

Social Welfare ◽

Recovery Rate ◽

Closed Loop ◽

Sensitivity Analyses ◽

Waste Products ◽

The Government ◽

Regulation Model ◽

Rate Threshold

In order to improve the recovery rate of waste products and maximize the social welfare, this paper investigates the problem of government setting a recovery rate threshold for the recycler in the closed-loop supply chain (CLSC) with the information asymmetry. By establishing the government incentive regulation model, the government can disclose the true recovery cost of the recycler and guide the recycler to make an reasonable effort. In this study, our model obtains the best recovery rate threshold for the recycler from the perspective of maximizing social welfare. Then, we conduct some sensitivity analyses and explore the impacts of related factors on the strategies-making of government and supply chain players. The results of the study indicates that the recovery rate threshold set not only depends on the operation efficiency of the recycler, it also affected by the consumers behavior and the production efficiency of manufacturer. The government should not pursue a high recovery rate blindly, more attention should be paid to control the cost of effort made by the recycler. With the increasing of the negative utility for the recycler to make effort, the government will improve the recovery threshold, otherwise, the threshold will decrease. The results facilitate scientific incentive mechanism development, and provide a reference for promoting CLSC operations.

Research on Closed-Loop Supply Chain Decision-Making in Different Cooperation Modes with Government’s Reward-Penalty Mechanism

Sustainability ◽

10.3390/su13116425 ◽

2021 ◽

Vol 13 (11) ◽

pp. 6425

Author(s):

Quanxi Li ◽

Haowei Zhang ◽

Kailing Liu

Keyword(s):

Supply Chain ◽

Closed Loop ◽

Stackelberg Game ◽

Recycling Rate ◽

Transfer Payment ◽

Asymmetry Of Information ◽

Optimal Decisions ◽

The Government ◽

In closed-loop supply chains (CLSC), manufacturers, retailers, and recyclers perform their duties. Due to the asymmetry of information among enterprises, it is difficult for them to maximize efficiency and profits. To maximize the efficiency and profit of the CLSC, this study establishes five cooperation models of CLSC under the government‘s reward–penalty mechanism. We make decisions on wholesale prices, retail prices, transfer payment prices, and recovery rates relying on the Stackelberg game method and compare the optimal decisions. This paper analyzes the impact of the government reward-penalty mechanism on optimal decisions and how members in CLSC choose partners. We find that the government’s reward-penalty mechanism can effectively increase the recycling rate of used products and the total profit of the closed-loop supply chain. According to the calculation results of the models, under the government’s reward-penalty mechanism, the cooperation can improve the CLSC’s used products recycling capacity and profitability. In a supply chain, the more members participate in the cooperation, the higher profit the CLSC obtain. However, the cooperation mode of all members may lead to monopoly, which is not approved by government and customers.

Information Sharing in a Closed-Loop Supply Chain with Asymmetric Demand Forecasts

Mathematical Problems in Engineering ◽

10.1155/2017/9785759 ◽

2017 ◽

Vol 2017 ◽

pp. 1-12 ◽

Cited By ~ 5

Author(s):

Pan Zhang ◽

Zhongkai Xiong

Keyword(s):

Supply Chain ◽

Information Sharing ◽

Closed Loop ◽

Collection Efficiency ◽

Demand Forecast ◽

Make To Order ◽

Make To Stock ◽

The Impact ◽

Demand Forecasts

This paper studies the problem of sharing demand forecast information in a closed-loop supply chain with the manufacturer collecting and remanufacturing. We investigate two scenarios: the “make-to-order” scenario, in which the manufacturer schedules production based on the realized demand, and the “make-to-stock” scenario, in which the manufacturer schedules production before the demand is known. For each scenario, we find that it is possible for the retailer to share his forecast without incentives when the collection efficiency of the manufacturer is high. When the efficiency is moderate, information sharing can be realized by a bargaining mechanism, and when the efficiency is low, non-information sharing is a unique equilibrium. Moreover, the possibility of information sharing in the make-to-stock scenario is higher than that in the make-to-order scenario. In addition, we analyze the impact of demand forecasts’ characteristics on the value of information sharing in both scenarios.

Research on Pricing Strategy of the Closed-Loop Supply Chain in Heterogeneous Market

Applied Mechanics and Materials ◽

10.4028/www.scientific.net/amm.236-237.321 ◽

2012 ◽

Vol 236-237 ◽

pp. 321-325

Author(s):

Hong Wei Jiang

Keyword(s):

Supply Chain ◽

Closed Loop ◽

Pricing Strategies ◽

Supply Chain System ◽

Waste Products ◽

Pricing Decisions ◽

Product Pricing ◽

The Impact ◽

Optimum Production

This paper constructs a closed-loop supply chain system with the manufacturer recycling waste products from the retailer based on game theory in heterogeneous market in which the price of the new product is different from that of the remanufactured product. The optimal pricing decisions of the supply chain without remanufacturing and the closed-loop supply chain with remanufacturing are obtained. Through theoretical analysis and numerical simulation, we obtain the optimum production and pricing strategies, and analyze the impact of the consumers’ acceptance for the remanufactured product on product pricing, which provides a basis for the closed-loop supply chain’s production decisions.

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

Complexity ◽

10.1155/2020/7506791 ◽

2020 ◽

Vol 2020 ◽

pp. 1-14 ◽

Cited By ~ 1

Author(s):

Jing Li ◽

Shuying Gong

Keyword(s):

Supply Chain ◽

Cost Sharing ◽

Closed Loop ◽

Collection Efficiency ◽

Optimal Strategies ◽

Marginal Effect ◽

Low Carbon ◽

Dual Source ◽

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.

Decision-Making of a Dual-Channel Closed-Loop Supply Chain in the Context Government Policy: A Dynamic Game Theory

Discrete Dynamics in Nature and Society ◽

10.1155/2020/2313698 ◽

2020 ◽

Vol 2020 ◽

pp. 1-19 ◽

Cited By ~ 1

Author(s):

Xuemei Zhang ◽

Qianwen Li ◽

Guohu Qi

Keyword(s):

Decision Making ◽

Supply Chain ◽

Social Welfare ◽

Carbon Emission ◽

Closed Loop ◽

Dynamic Game ◽

Total Carbon ◽

Dual Channel ◽

The Government

To analyze the effect of government reward-penalty policies (RPPs) on the decisions of a dual-channel closed-loop supply chain (CLSC), this paper endogenizes government decision variables to maximize social welfare and builds four decision-making models (without RPP, with carbon emission RPP, with recycling amount RPP, and with double RPP) by using a Stackelberg dynamic game between the government and supply chain members. The research results show that, (1) in the four models, there exist optimal prices and reward-penalty coefficients to maximize the supply chain members’ profits and social welfare. (2) Comparing with model W, under most conditions, three government RPPs decrease the demand for new products and increase the demand for remanufactured products. Comparing the case without RPP, R’s profit decreases, and when the carbon emission cap is very big and the lowest recycling amount is very small, M’s profit increases. (3) In most cases, the three government RPPs can effectively control the total carbon emission and increase the social welfare, but they damage the benefits of retailers and consumers. With the increase of the carbon emission intensity of remanufactured products, the government can implement the double RPP, the carbon emission RPP, and the recycling amount RPP in turn.

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

Mathematical Problems in Engineering ◽

10.1155/2016/1049514 ◽

2016 ◽

Vol 2016 ◽

pp. 1-9 ◽

Cited By ~ 6

Author(s):

Wenxue Ran ◽

Fan Chen ◽

Qianni Wu ◽

Sen Liu

Keyword(s):

Supply Chain ◽

Closed Loop ◽

Numerical Study ◽

Supply And Demand ◽

Waste Glass ◽

Manufacturing Cost ◽

Single Node ◽

Waste Products ◽

Glass Bottles

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.

Game-Theoretic Analysis to Examine How Government Subsidy Policies Affect a Closed-Loop Supply Chain Decision

Applied Sciences ◽

10.3390/app10010145 ◽

2019 ◽

Vol 10 (1) ◽

pp. 145 ◽

Cited By ~ 11

Author(s):

Izabela Ewa Nielsen ◽

Sani Majumder ◽

Subrata Saha

Keyword(s):

Supply Chain ◽

Product Quality ◽

Closed Loop ◽

Investment Efficiency ◽

Government Subsidy ◽

Government Organizations ◽

Game Theoretic Analysis ◽

Game Theoretic ◽

The Government

The pros and cons of government subsidy policies in a closed-loop supply chain (CLSC) setting on optimal pricing, investment decisions in improving product quality, and used product collection under social welfare (SW) optimization goal have not been examined comprehensively. This study compares the outcomes of three government policies under manufacturer-Stackelberg (MS) and retailer-Stackelberg (RS), namely (i) direct subsidy to the consumer, (ii) subsidy to the manufacturer to stimulate used product collection, and (iii) subsidy to the manufacturer to improve product quality. Results demonstrate that the greening level, used product collection, and SW are always higher under the RS game, but the rate of a subsidy granted by the government is always higher under the MS game. Profits for the CLSC members and SW are always higher if the government provides a subsidy directly to the consumer, but productivity of investment in the perspective of the manufacturer or government are less. In a second policy, the government organizations grant a subsidy to the manufacturer to stimulate used product collection, but it does not necessarily yield the desired outcome compared to others. In a third policy, the manufacturer receives a subsidy on a research and development (R&D) investment, but it yields a sub-optimal greening level. This study reveals that the outcomes of subsidy policies can bring benefit to consumers and add a degree of complication for CLSC members; government organizations need to inspect carefully among attributes, mainly product type, power of CLSC members, and investment efficiency for the manufacturer, before implementing any subsidy policies so that it can lead to an environmentally and economically viable outcome.