Enabling Reuse and Recycling in Circular Supply Chains: A Game-Theoretic Analysis of Glass Bottle Refilling

Background : Circular economy (CE) practices, such as glass bottle refilling, are critical to the beverage industry’s sustainability. However, coordinating manufacturer marketing efforts with collector reverse logistics investment remains a strategic challenge. Methods : This study develops a Stackelberg game-theoretic model featuring a manufacturer and a collector. The model incorporates communication effort as a demand driver and analyzes the role of bottle quality (damage rates) and the reusable bottle unit cost on the optimal decisions of the players and the collection rate. Results : Equilibrium analysis shows that the quality of the reusable bottle and the rate of bottle damage are crucial in reducing the operational costs of the refilling program. Additionally, these factors significantly influence the decisions made by manufacturers and collectors regarding their investments in communication and collection systems. Conclusions : The study demonstrates that successful refilling requires strategic coordination between manufacturers and collectors, particularly in terms of communication and investment in reverse logistics. Managerial insights indicate that investing in the quality of bottles is the key factor for achieving joint profitability.