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The effects of government subsidies on decentralised reverse supply chains

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  • I-Hsuan Hong
  • Pin-Chun Chen
  • Hsien-Ting Yu

Abstract

This paper examines the impacts of exogenous government subsidies on recycled material flows in decentralised reverse supply chains where players behave according to their own interests. We present a four-tiered network equilibrium model consisting of the sources of electronic scrap products and the collectors, processors and demand markets. We mathematically transform the players’ optimality conditions governing players’ behaviours into a variational inequality formulation. We investigate the impact of alternate schemes of government subsidies on the equilibrium amount, subsidy effectiveness and subsidy elasticity. The real-world case study shows that subsidising the tier of processors demonstrates the superiority of the investigated performance measures.

Suggested Citation

  • I-Hsuan Hong & Pin-Chun Chen & Hsien-Ting Yu, 2016. "The effects of government subsidies on decentralised reverse supply chains," International Journal of Production Research, Taylor & Francis Journals, vol. 54(13), pages 3962-3977, July.
    • Handle: RePEc:taf:tprsxx:v:54:y:2016:i:13:p:3962-3977
    DOI: 10.1080/00207543.2016.1167982
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    1. Xie, Lei & Hou, Pengwen & Han, Hongshuai, 2021. "Implications of government subsidy on the vaccine product R&D when the buyer is risk averse," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 146(C).
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    3. Alireza Bakhshi & Jafar Heydari, 2023. "An optimal put option contract for a reverse supply chain: case of remanufacturing capacity uncertainty," Annals of Operations Research, Springer, vol. 324(1), pages 37-60, May.
    4. Wu, Cheng-Han, 2021. "A dynamic perspective of government intervention in a competitive closed-loop supply chain," European Journal of Operational Research, Elsevier, vol. 294(1), pages 122-137.
    5. Ma, Shigui & He, Yong & Gu, Ran & Li, Shanshan, 2021. "Sustainable supply chain management considering technology investments and government intervention," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    6. Seyyed-Mahdi Hosseini-Motlagh & Mona Jazinaninejad & Nazanin Nami, 2022. "Coordinating a socially concerned reverse supply chain for pharmaceutical waste management considering government role," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(2), pages 1852-1877, February.
    7. Cao, Jian & Wu, Sisi & Kumar, Sanjay, 2023. "Recovering and remanufacturing to fulfill EPR regulation in the presence of secondary market," International Journal of Production Economics, Elsevier, vol. 263(C).

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