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The Decision-Making Analysis on End-of-Life Vehicle Recycling and Remanufacturing under Extended Producer Responsibility Policy

Author

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  • Syed Abdul Rehman Khan

    (School of Management and Engineering, Xuzhou University of Technology, Xuzhou 221018, China
    Department of Management Sciences, ILMA University, Karachi 75190, Pakistan)

  • Danish Iqbal Godil

    (Dar-ul-Madina International University, Islamabad 44000, Pakistan)

  • George Thomas

    (Department of Marketing, College of Business Administration, Prince Sultan University, Rafha Street, Riyadh 11586, Saudi Arabia)

  • Muhammad Tanveer

    (Prince Sultan University, Rafha Street, Riyadh 11586, Saudi Arabia)

  • Hafiz Muhammad Zia-ul-haq

    (Faculty of Business Economics and Social Development, Universiti Malaysia Terengganu, Kuala Terengganu 21030, Malaysia)

  • Haider Mahmood

    (Department of Finance, College of Business Administration, Prince Sattam Bin Abdulaziz University, Al-kharj 11942, Saudi Arabia)

Abstract

This research develops a dual-cycle ELV recycling and remanufacturing system to better understand and improve the efficiency of the ELV recycling and remanufacturing businesses. For the flawless operation of this system, the researchers employed evolutionary game theory to establish a game model between original vehicle manufacturers (OVMs) and third-party recyclers with the government involved. This research presents evolutionary stable strategies (ESS) that could promote an ELV recycling and remanufacturing system. Results show that OVMs’ expected profit difference between choosing and not choosing authorization is crucial in their ESS. The licensing fee plays a part of OVMs’ expected profit difference. Based on the results, optimal ESS could be achieved when the OVMs’ expected profit difference between choosing authorization and not choosing authorization and the third-party recyclers’ profit when paying the licensing fee are both positive. Then, the two groups’ involvement in dual-cycle ELV recycling and the remanufacturing system can be ensured. This research implicates the government to devise appropriate reward and punishment strategy to encourage OVMs and third-party recyclers to collaborate for efficient recycling and remanufacturing systems. Particularly, the government is suggested to impose strict restrictions on OVMs to carry ELV recycling and provide support to promote recycling quantity standards. Hence, the ELV recycling and remanufacturing system would be strengthened, thus improving waste management which is crucial for both environmental and resource efficiency.

Suggested Citation

  • Syed Abdul Rehman Khan & Danish Iqbal Godil & George Thomas & Muhammad Tanveer & Hafiz Muhammad Zia-ul-haq & Haider Mahmood, 2021. "The Decision-Making Analysis on End-of-Life Vehicle Recycling and Remanufacturing under Extended Producer Responsibility Policy," Sustainability, MDPI, vol. 13(20), pages 1-14, October.
  • Handle: RePEc:gam:jsusta:v:13:y:2021:i:20:p:11215-:d:653893
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    References listed on IDEAS

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    1. Geraldo Ferrer & Jayashankar M. Swaminathan, 2006. "Managing New and Remanufactured Products," Management Science, INFORMS, vol. 52(1), pages 15-26, January.
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    3. 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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    5. Cao, Jian & Lu, Bo & Chen, Yangyang & Zhang, Xuemei & Zhai, Guangshu & Zhou, Gengui & Jiang, Boxin & Schnoor, Jerald L., 2016. "Extended producer responsibility system in China improves e-waste recycling: Government policies, enterprise, and public awareness," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 882-894.
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    Cited by:

    1. Fatin Amrina A. Rashid & Hawa Hishamuddin & Nizaroyani Saibani & Mohd Radzi Abu Mansor & Zambri Harun, 2022. "A Review of Supply Chain Uncertainty Management in the End-of-Life Vehicle Industry," Sustainability, MDPI, vol. 14(19), pages 1-28, October.
    2. Altaf Hossain Molla & Hilal Shams & Zambri Harun & Mohd Nizam Ab Rahman & Hawa Hishamuddin, 2022. "An Assessment of Drivers and Barriers to Implementation of Circular Economy in the End-of-Life Vehicle Recycling Sector in India," Sustainability, MDPI, vol. 14(20), pages 1-25, October.
    3. Faridzah Jamaluddin & Nizaroyani Saibani & Siti Maisarah Mohd Pisal & Dzuraidah Abd Wahab & Hawa Hishamuddin & Zainuddin Sajuri & Rasyikah Md Khalid, 2022. "End-of-Life Vehicle Management Systems in Major Automotive Production Bases in Southeast Asia: A Review," Sustainability, MDPI, vol. 14(21), pages 1-23, November.

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