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Government Reward-Penalty Mechanism in Dual-Channel Closed-Loop Supply Chain

Author

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  • Haitao Chen

    (School of Management, Jilin University, Changchun 130015, China
    These authors contributed equally to this work.)

  • Zhaohui Dong

    (School of Management, Jilin University, Changchun 130015, China)

  • Gendao Li

    (School of Economics and Management, Changchun University of Science and Technology, Changchun 130000, China
    These authors contributed equally to this work.)

Abstract

This study establishs a dual channel closed-loop supply chain (CLSC) model under a government–penalty mechanism (RPM) consisting a dual-channel manufacturer, a retailer, and the government. We consider a Stackelberg game between the manufacturer and the retailer, and the government rewards or punishes manufacturers on the basis of the collection rate of used products. This paper analyzes the influence of government RPM on the optimal decisions, the relationship between the two sales channels, and the total social welfare of the supply chain system. We find that the government RPM can improve the stability of the dual-channel supply chain and the collection rate of the used products. Moreover, we are the first to provide a method of deriving the optimal government RPM through a numerical example.

Suggested Citation

  • Haitao Chen & Zhaohui Dong & Gendao Li, 2020. "Government Reward-Penalty Mechanism in Dual-Channel Closed-Loop Supply Chain," Sustainability, MDPI, vol. 12(20), pages 1-15, October.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:20:p:8602-:d:430363
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    References listed on IDEAS

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    Cited by:

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    2. Syed Asif Raza, 2020. "Price Differentiation and Inventory Decisions in a Socially Responsible Dual-Channel Supply Chain with Partial Information Stochastic Demand and Cannibalization," Sustainability, MDPI, vol. 12(22), pages 1-42, November.
    3. Mina Rahimi & Ashkan Hafezalkotob & Sobhan Asian & Luis Martínez, 2021. "Environmental Policy Making in Supply Chains under Ambiguity and Competition: A Fuzzy Stackelberg Game Approach," Sustainability, MDPI, vol. 13(4), pages 1-24, February.

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