IDEAS home Printed from
   My bibliography  Save this article

Transportation and economies of scale in recycling low-value materials


  • Sheu, Jiuh-Biing
  • Chen, Yenming J.


This study investigates the economic incentive-drivers used in various configurations in green supply chains. The configurations of competitive suppliers and integrated transportation are studied for recycled materials with low economic value but high environmental impact. Arguments are embodied in a competitive game that manifests interactions among competing manufacturers, suppliers of virgin materials, suppliers of recycled materials, and the government. Because of market size and technology limitation, long hauling to few remote treatment facilities is observed in practice. Demand-dependent transportation efficiency arisen from economies of scale thus affects the equilibrium states in the game of this recycling system. Managerial insights are provided to encourage the use of low-value recycled materials. A tax-subsidy system is conditionally effective when using recycled materials maintains quality. When quality becomes compromised by mixing recycled materials, we find that integrating suppliers of recycled materials with those of virgin materials can make the tax-subsidy system effective again.

Suggested Citation

  • Sheu, Jiuh-Biing & Chen, Yenming J., 2014. "Transportation and economies of scale in recycling low-value materials," Transportation Research Part B: Methodological, Elsevier, vol. 65(C), pages 65-76.
  • Handle: RePEc:eee:transb:v:65:y:2014:i:c:p:65-76
    DOI: 10.1016/j.trb.2014.03.008

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Benchekroun, Hassan & Van Long, Ngo, 2002. "On the multiplicity of efficiency-inducing tax rules," Economics Letters, Elsevier, vol. 76(3), pages 331-336, August.
    2. Lin, Cheng-Chang & Wang, Tsai-Hsin, 2011. "Build-to-order supply chain network design under supply and demand uncertainties," Transportation Research Part B: Methodological, Elsevier, vol. 45(8), pages 1162-1176, September.
    3. Chang, Tsung-Sheng, 2009. "Decision support for truckload carriers in one-shot combinatorial auctions," Transportation Research Part B: Methodological, Elsevier, vol. 43(5), pages 522-541, June.
    4. Walls, Margaret & Palmer, Karen, 2001. "Upstream Pollution, Downstream Waste Disposal, and the Design of Comprehensive Environmental Policies," Journal of Environmental Economics and Management, Elsevier, vol. 41(1), pages 94-108, January.
    5. Hall, Randolph W., 1996. "On the integration of production and distribution: Economic order and production quantity implications," Transportation Research Part B: Methodological, Elsevier, vol. 30(5), pages 387-403, October.
    6. Ian M. Dobbs, 1991. "Litter and Waste Management: Disposal Taxes versus User Charges," Canadian Journal of Economics, Canadian Economics Association, vol. 24(1), pages 221-227, February.
    7. Fleischmann, Moritz & Kuik, Roelof & Dekker, Rommert, 2002. "Controlling inventories with stochastic item returns: A basic model," European Journal of Operational Research, Elsevier, vol. 138(1), pages 63-75, April.
    8. Friesz, Terry L. & Lee, Ilsoo & Lin, Cheng-Chang, 2011. "Competition and disruption in a dynamic urban supply chain," Transportation Research Part B: Methodological, Elsevier, vol. 45(8), pages 1212-1231, September.
    9. Chen, Yenming J. & Sheu, Jiuh-Biing, 2009. "Environmental-regulation pricing strategies for green supply chain management," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(5), pages 667-677, September.
    10. Nagurney, Anna & Toyasaki, Fuminori, 2005. "Reverse supply chain management and electronic waste recycling: a multitiered network equilibrium framework for e-cycling," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 41(1), pages 1-28, January.
    11. Sheu, Jiuh-Biing & Chen, Yenming J., 2012. "Impact of government financial intervention on competition among green supply chains," International Journal of Production Economics, Elsevier, vol. 138(1), pages 201-213.
    12. Eskeland, Gunnar S. & Harrison, Ann E., 2003. "Moving to greener pastures? Multinationals and the pollution haven hypothesis," Journal of Development Economics, Elsevier, vol. 70(1), pages 1-23, February.
    13. Geraldo Ferrer & Jayashankar M. Swaminathan, 2006. "Managing New and Remanufactured Products," Management Science, INFORMS, vol. 52(1), pages 15-26, January.
    14. Laurens G. Debo & L. Beril Toktay & Luk N. Van Wassenhove, 2005. "Market Segmentation and Product Technology Selection for Remanufacturable Products," Management Science, INFORMS, vol. 51(8), pages 1193-1205, August.
    15. R. Canan Savaskan & Shantanu Bhattacharya & Luk N. Van Wassenhove, 2004. "Closed-Loop Supply Chain Models with Product Remanufacturing," Management Science, INFORMS, vol. 50(2), pages 239-252, February.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. repec:spr:endesu:v:19:y:2017:i:3:d:10.1007_s10668-016-9782-y is not listed on IDEAS


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transb:v:65:y:2014:i:c:p:65-76. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.