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Dual-Recycling Channel Decision in a Closed-Loop Supply Chain with Cost Disruptions

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  • Yanting Huang

    (School of Management, Huazhong University of Science and Technology, Wuhan 430074, China)

  • Zongjun Wang

    (School of Management, Huazhong University of Science and Technology, Wuhan 430074, China)

Abstract

This paper investigates cost disruptions of new and remanufactured products in a closed-loop supply chain where a manufacturer and a third-party collector recycle used products through online-recycling and offline-recycling channels, respectively. We use a Stackelberg game to acquire the equilibrium decisions of dual-recycling and single-recycling channels and analyze how cost disruptions affect the manufacturer’ production and collection strategies. We show that, cost disruption of new products produces a positive impact whilst the remanufacturing cost disruption has a negative impact on collection quantity of used products and negative cost disruptions of both new and remanufactured products could be profitable to the manufacturer. As for the manufacturer’s channel choice, the dual-recycling channel dominates single-recycling channels when new product cost faces positive disruption, because the manufacturer acts as both a buyer and a competitor to the collector and can determine an appropriate acquisition price and transfer price to coordinate the online-offline recycling channel. While if cost disruption of new products is negative, the manufacturer prefers the dual-recycling channel instead of single-recycling channels only if the remanufacturing cost faces large size of negative disruption.

Suggested Citation

  • Yanting Huang & Zongjun Wang, 2017. "Dual-Recycling Channel Decision in a Closed-Loop Supply Chain with Cost Disruptions," Sustainability, MDPI, vol. 9(11), pages 1-28, November.
    • Handle: RePEc:gam:jsusta:v:9:y:2017:i:11:p:2004-:d:117499
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    Cited by:

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    2. Sungki Kim & Nina Shin & Sangwook Park, 2020. "Closed-Loop Supply Chain Coordination under a Reward–Penalty and a Manufacturer’s Subsidy Policy," Sustainability, MDPI, vol. 12(22), pages 1-28, November.
    3. Yang Liu & Yang Zhang, 2018. "Closed Loop Supply Chain under Power Configurations and Dual Competitions," Sustainability, MDPI, vol. 10(5), pages 1-23, May.
    4. Hadi Sahebi & Shayan Ranjbar & Ashkan Teymouri, 2022. "Investigating different reverse channels in a closed-loop supply chain: a power perspective," Operational Research, Springer, vol. 22(3), pages 1939-1985, July.
    5. Hong, Xianpei & Cao, Xinlu & Gong, Yeming & Chen, Wanying, 2021. "Quality information acquisition and disclosure with green manufacturing in a closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 232(C).
    6. Luttiely Santos Oliveira & Ricardo Luiz Machado, 2021. "Application of optimization methods in the closed-loop supply chain: a literature review," Journal of Combinatorial Optimization, Springer, vol. 41(2), pages 357-400, February.
    7. Hao Guo & Congdong Li & Ying Zhang & Chunnan Zhang & Mengmeng Lu, 2018. "A Location-Inventory Problem in a Closed-Loop Supply Chain with Secondary Market Consideration," Sustainability, MDPI, vol. 10(6), pages 1-20, June.
    8. Muhammad Arshad & Qazi Salman Khalid & Jaime Lloret & Antonio Leon, 2018. "An Efficient Approach for Coordination of Dual-Channel Closed-Loop Supply Chain Management," Sustainability, MDPI, vol. 10(10), pages 1-20, September.
    9. Yuan, Yanhong & Yang, Jinyao & Li, Yang & Li, Wei, 2020. "Necessary conditions for coordination of dual-channel closed-loop supply chain," Technological Forecasting and Social Change, Elsevier, vol. 151(C).
    10. Aijun Liu & Yaxuan Xiao & Xiaohui Ji & Kai Wang & Sang-Bing Tsai & Hui Lu & Jinshi Cheng & Xinjun Lai & Jiangtao Wang, 2018. "A Novel Two-Stage Integrated Model for Supplier Selection of Green Fresh Product," Sustainability, MDPI, vol. 10(7), pages 1-23, July.
    11. Ehsan Shekarian & Simme Douwe Flapper, 2021. "Analyzing the Structure of Closed-Loop Supply Chains: A Game Theory Perspective," Sustainability, MDPI, vol. 13(3), pages 1-32, January.
    12. Yong Liu & Zhen-juan Xia & Qian-qian Shi & Qian Xu, 2021. "Pricing and coordination of waste electrical and electronic equipment under third-party recycling in a closed-loop supply chain," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(8), pages 12077-12094, August.

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