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Optimal Stackelberg Strategies For Closed-Loop Supply Chain With Third-Party Reverse Logistics

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Author Info

  • NI-NA YAN

    ()
    (Business School, Central University of Finance and Economics, Beijing, 100081, P. R. China)

  • BAO-WEN SUN

    ()
    (Information School, Central University of Finance and Economics, Beijing, 100081, P. R. China)

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    Abstract

    Closed-loop supply chain (CLSC), especially the reverse logistics system with the third-party reverse logistics providers (3PRLP) is very important for materials return, remanufacturing, repair, recovery, recycling, and reusing. In this paper, based on a one-leader and multi-follower Stackelberg game with the manufacturer being the leader, we model a multi-echelon CLSC with 3PRLP under the consideration of impacts of environmental legislation on scrap recycling. Furthermore, in order to encourage the 3PRLP to exert him to return activities we design a target rebate-punish contract between the manufacturer and the 3PRLP under both stochastic price-dependent demands and stochastic effort-dependent returns. We analyze the closed-form analytic expressions for both united optimization strategies in centralized closed-loop system and the Stackelberg strategies in decentralized system, and conclude that the wholesale price contract may not coordinate the forward supply chain and the target rebate-punish may coordinate the reverse chain under certain conditions. Finally, according to the practice of Chinese steel enterprises we carry out some simulation experiments to validate our theoretical analyses and gain some insights into the impacts of reverse logistics activities on the practitioners operations and decisions.

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    Bibliographic Info

    Article provided by World Scientific Publishing Co. Pte. Ltd. in its journal Asia-Pacific Journal of Operational Research.

    Volume (Year): 29 (2012)
    Issue (Month): 05 ()
    Pages: 1250026-1-1250026-21

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    Handle: RePEc:wsi:apjorx:v:29:y:2012:i:05:p:1250026-1-1250026-21

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    Related research

    Keywords: Closed-loop supply chain; third-party reverse logistics; Stackelberg games; contract coordination; scraps recycling;

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    Cited by:
    1. Cheng-Feng Cheng, 2012. "Evaluate the Effectiveness of Manager Compensation," International Journal of Business and Economics, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 11(1), pages 25-44, June.

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