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Recovery decisions of a producer in a legislative disposal fee environment

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  • Özdemir, Öznur
  • Denizel, Meltem
  • Guide, V. Daniel R.

Abstract

The main objectives of the environmental legislation originating from extended producer responsibility (EPR) principle are to lead producers to undertake recovery initiatives for their end-of-use products and to promote environmentally desirable product design. It is still controversial whether current implementations of EPR principle are effective in attaining these objectives. This study seeks to answer the following questions: (1) What is the impact of EPR legislation on the product recovery decisions of producers? (2) How do the redesign opportunities (i.e., design for disassembly) affect the willingness of producers for product recovery? (3) How do the investment needs to start recovery practices and the reluctance of producers to allocate sufficient funds for this purpose affect the optimal recovery decisions? We use stylized economic models to represent the implementation in practice and solving our models we obtain closed form and numerical solutions that help us to see the impact of various parameters on the optimal decisions of a producer. Our findings indicate that redesign opportunities encourage producers for more recovery, however the reluctance of producers to cover the initial investments may substantially reduce the effectiveness of the legislation and the recovery amounts.

Suggested Citation

  • Özdemir, Öznur & Denizel, Meltem & Guide, V. Daniel R., 2012. "Recovery decisions of a producer in a legislative disposal fee environment," European Journal of Operational Research, Elsevier, vol. 216(2), pages 293-300.
    • Handle: RePEc:eee:ejores:v:216:y:2012:i:2:p:293-300
    DOI: 10.1016/j.ejor.2011.07.035
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    Cited by:

    1. Xiaoxiao Chang & Guangye Xu & Qian Wang & Yongguang Zhong, 2020. "A Game Theoretic Approach for Eco-Design and Remanufacturing Considering Take-Back Policy," Sustainability, MDPI, vol. 12(17), pages 1-21, September.
    2. Pangburn, Michael S. & Stavrulaki, Euthemia, 2014. "Take back costs and product durability," European Journal of Operational Research, Elsevier, vol. 238(1), pages 175-184.
    3. Chen, Jen-Yi & Dimitrov, Stanko & Pun, Hubert, 2019. "The impact of government subsidy on supply Chains’ sustainability innovation," Omega, Elsevier, vol. 86(C), pages 42-58.
    4. Choi, Tsan-Ming & Chow, Pui-Sze & Lee, Chang Hwan & Shen, Bin, 2018. "Used intimate apparel collection programs: A game-theoretic analytical study," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 109(C), pages 44-62.
    5. Forlin, Valeria & Scholz, Eva-Maria, 2020. "Strategic take-back programs when consumers have heterogeneous environmental preferences," Resource and Energy Economics, Elsevier, vol. 60(C).
    6. Pazoki, Mostafa & Zaccour, Georges, 2019. "A mechanism to promote product recovery and environmental performance," European Journal of Operational Research, Elsevier, vol. 274(2), pages 601-614.
    7. Pazoki, Mostafa & Samarghandi, Hamed, 2020. "Take-back regulation: Remanufacturing or Eco-design?," International Journal of Production Economics, Elsevier, vol. 227(C).
    8. Georgiadis, Patroklos & Athanasiou, Efstratios, 2013. "Flexible long-term capacity planning in closed-loop supply chains with remanufacturing," European Journal of Operational Research, Elsevier, vol. 225(1), pages 44-58.
    9. Marinella Favot, 2014. "Extended producer responsibility and e-waste management: do institutions matter ?," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2014(1), pages 123-144.
    10. Wang, Jian & He, Shulin, 2023. "Government interventions in closed-loop supply chains with modularity design," International Journal of Production Economics, Elsevier, vol. 264(C).
    11. Meng, Kai & Cao, Ying & Peng, Xianghui & Prybutok, Victor & Gupta, Varun, 2020. "Demand-dependent recovery decision-making of a batch of products for sustainability," International Journal of Production Economics, Elsevier, vol. 224(C).
    12. Liang Shen & Runjie Fan & Yuyan Wang & Zhaoqing Yu & Rongyun Tang, 2020. "Impacts of Environmental Regulation on the Green Transformation and Upgrading of Manufacturing Enterprises," IJERPH, MDPI, vol. 17(20), pages 1-14, October.
    13. Reimann, Marc & Xiong, Yu & Zhou, Yu, 2019. "Managing a closed-loop supply chain with process innovation for remanufacturing," European Journal of Operational Research, Elsevier, vol. 276(2), pages 510-518.
    14. Liu, Zhi & Li, Kevin W. & Tang, Juan & Gong, Bengang & Huang, Jun, 2021. "Optimal operations of a closed-loop supply chain under a dual regulation," International Journal of Production Economics, Elsevier, vol. 233(C).
    15. Jinglve Wang & Hongping Yuan, 2023. "Deciphering the Innovation Subsidy Puzzle: Government Choices amid Supply Chain Encroachment," Mathematics, MDPI, vol. 11(23), pages 1-38, November.
    16. Salman Shooshtarian & Tayyab Maqsood & Peter SP Wong & Malik Khalfan & Rebecca J. Yang, 2021. "Extended Producer Responsibility in the Australian Construction Industry," Sustainability, MDPI, vol. 13(2), pages 1-20, January.

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