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Optimal Stackelberg Strategies For Closed-Loop Supply Chain With Third-Party Reverse Logistics

Author

Listed:
  • NI-NA YAN

    (Business School, Central University of Finance and Economics, Beijing, 100081, P. R. China)

  • BAO-WEN SUN

    (Information School, Central University of Finance and Economics, Beijing, 100081, P. R. China)

Abstract

Closed-loop supply chain (CLSC), especially the reverse logistics system with the third-party reverse logistics providers (3PRLP) is very important for materials return, remanufacturing, repair, recovery, recycling, and reusing. In this paper, based on a one-leader and multi-follower Stackelberg game with the manufacturer being the leader, we model a multi-echelon CLSC with 3PRLP under the consideration of impacts of environmental legislation on scrap recycling. Furthermore, in order to encourage the 3PRLP to exert him to return activities we design a target rebate-punish contract between the manufacturer and the 3PRLP under both stochastic price-dependent demands and stochastic effort-dependent returns. We analyze the closed-form analytic expressions for both united optimization strategies in centralized closed-loop system and the Stackelberg strategies in decentralized system, and conclude that the wholesale price contract may not coordinate the forward supply chain and the target rebate-punish may coordinate the reverse chain under certain conditions. Finally, according to the practice of Chinese steel enterprises we carry out some simulation experiments to validate our theoretical analyses and gain some insights into the impacts of reverse logistics activities on the practitioners operations and decisions.

Suggested Citation

  • Ni-Na Yan & Bao-Wen Sun, 2012. "Optimal Stackelberg Strategies For Closed-Loop Supply Chain With Third-Party Reverse Logistics," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 29(05), pages 1-21.
    • Handle: RePEc:wsi:apjorx:v:29:y:2012:i:05:n:s0217595912500261
    DOI: 10.1142/S0217595912500261
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    Citations

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    Cited by:

    1. Chen, Jianxin & Hou, Rui & Xiao, Lu & Zhang, Tonghua & Zhou, Yongwu, 2023. "Dynamic corporate social responsibility adjustment strategies of a closed-loop supply chain with fairness concerns and supply chain financing," Chaos, Solitons & Fractals, Elsevier, vol. 168(C).
    2. Cheng-Feng Cheng, 2012. "Evaluate the Effectiveness of Manager Compensation," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 11(1), pages 25-44, June.
    3. 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.
    4. Govindan, Kannan & Kadziński, Miłosz & Ehling, Ronja & Miebs, Grzegorz, 2019. "Selection of a sustainable third-party reverse logistics provider based on the robustness analysis of an outranking graph kernel conducted with ELECTRE I and SMAA," Omega, Elsevier, vol. 85(C), pages 1-15.
    5. Jianbin Li & Qifei Wang & Hong Yan & Stuart X. Zhu, 2016. "Optimal Remanufacturing and Pricing Strategies Under Name-Your-Own-Price Auctions and Stochastic Demand," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 33(01), pages 1-22, February.
    6. Mahmoudzadeh, Mahdi & Mansour, Saeed & Karimi, Behrouz, 2013. "To develop a third-party reverse logistics network for end-of-life vehicles in Iran," Resources, Conservation & Recycling, Elsevier, vol. 78(C), pages 1-14.
    7. Luttiely Santos Oliveira & Ricardo Luiz Machado, 2021. "Application of optimization methods in the closed-loop supply chain: a literature review," Journal of Combinatorial Optimization, Springer, vol. 41(2), pages 357-400, February.
    8. Michael Krapp & Johannes B. Kraus, 2019. "Coordination contracts for reverse supply chains: a state-of-the-art review," Journal of Business Economics, Springer, vol. 89(7), pages 747-792, September.

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