Impact of robust decision strategies in the public sector on the profitability of plastic recycling

As household plastic products have become essential in daily life, increasing the plastic recycling rate is critical. However, the global average recycling rate remains remarkably low at 9%, primarily due to low profitability caused by uncertainty in waste management. In this study, we developed a robust closed-loop supply chain design model to address the uncertainty in plastic waste generation, incorporating two decision-making strategies. We proposed a theorem that enables the reformulation of the robust model into a tractable form for any shape of uncertainty set and developed a solution procedure to derive an optimal decentralized solution. Sensitivity analysis revealed that implementing a robust waste management approach under uncertain plastic waste volumes may reduce the profitability of plastic recycling. Conversely, adopting a wait-and-see strategy under uncertainty can help mitigate this decrease in profitability. Finally, we discussed the role of government in plastic waste management and in enhancing the economic viability of plastic recycling.