Sustainable Cascade Utilization in Closed-Loop Supply Chain: The Role of Collection Structures, Quality Restoration Costs, and Subsidy Policies

The increasing pressure on natural resources and the environment has intensified the need for sustainable cascade utilization in closed-loop supply chains (CLSCs). This study develops a game-theoretic framework to examine cascade utilization under both constant and heterogeneous quality restoration costs across three collection structures: centralized, manufacturer-led, and third-party collection. The results show that the relative performance of different structures depends on key economic conditions, including material recycling revenue and the comparative advantage of remanufacturing. No single structure dominates across all dimensions: a manufacturer-led collection tends to promote new product sales, while a third-party collection enhances remanufacturing and recovery levels, particularly under cost heterogeneity. Environmental performance, evaluated through collection quantity, cascade utilization efficiency, and an environmental impact indicator, also varies across structures, with cost heterogeneity shifting advantages toward the third-party collection. Policy analysis further indicates that both collection and remanufacturing subsidies increase recovery volumes but operate through distinct mechanisms. The collection subsidy expands return flows but may reduce cascade utilization efficiency by directing more low-quality products to recycling, whereas remanufacturing subsidy promotes higher-value reuse pathways and improves environmental performance. These findings highlight the importance of aligning collection structures and policy instruments under different cost conditions to enhance resource efficiency and support the circular economy and sustainable consumption and production objectives.