An Investigation of Subsidy Policies on Recycling and Remanufacturing System in Two-Echelon Supply Chain for Negative Binomial Distribution

This study investigates a two-stage production–inventory model with subsidy policies for paper cup recycling. The model includes remanufacturers, recyclers, and consumers, taking into account their preferences for different recycling channels. The negative binomial distribution of investment fund w is introduced and briefly studied. The influence of various subsidy strategies on the optimal pricing, profit, and recycling volume of the reverse supply chain is discussed. Numerical simulations show that increased consumer recycling preferences positively impact the recycling volume and profit. When subsidies are limited, subsidizing remanufacturers leads to higher recycling volumes, while subsidizing consumers results in higher profits at lower-to-middle subsidy levels. The findings suggest that policymakers can leverage different subsidy strategies to effectively manage the paper cup recycling supply chain and promote sustainability by incentivizing key stakeholders to participate in the recycling process. For example, subsidizing remanufacturers can increase the overall recycling volume by making it more financially viable for them to collect and process used cups, while subsidizing consumers can boost their participation and willingness to properly dispose of cups for recycling, leading to higher profits for the reverse supply chain.