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Game Analysis and Coordination of a Closed-Loop Supply Chain: Perspective of Components Reuse Strategy

Author

Listed:
  • Xiaomin Zhao

    (School of Management, Shanghai University, Shanghai 200444, China)

  • Xueli Bai

    (School of Management, Shanghai University, Shanghai 200444, China)

  • Zhihui Fan

    (School of Management, Shanghai University, Shanghai 200444, China)

  • Ting Liu

    (School of Management, Shanghai University, Shanghai 200444, China)

Abstract

This paper studies a closed-loop supply chain that covers three key members: Manufacturer, new components supplier, and recycled-components supplier. Considering the power of each member in the chain, we use game theory to analyze the optimal decision and coordination, particularly investigating the economic value of components reuse strategy. The results show that, in a decentralized setting, the value of components reuse highly depends on the attributes of the products. For the products with low price elasticity, reuse strategy is only beneficial to the recycled-components suppliers. Further investigation shows the manufacturer can use wholesale price contracts to coordinate and improve the supply chain’s performance.

Suggested Citation

  • Xiaomin Zhao & Xueli Bai & Zhihui Fan & Ting Liu, 2020. "Game Analysis and Coordination of a Closed-Loop Supply Chain: Perspective of Components Reuse Strategy," Sustainability, MDPI, vol. 12(22), pages 1-19, November.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:22:p:9681-:d:447995
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    Cited by:

    1. Ehsan Shekarian & Simme Douwe Flapper, 2021. "Analyzing the Structure of Closed-Loop Supply Chains: A Game Theory Perspective," Sustainability, MDPI, vol. 13(3), pages 1-32, January.

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