Closed‐loop supply chain network static equilibrium and dynamics under pollution permits system

Abstract

A closed‐loop supply chain network including multi‐manufacturing/remanufacturing firms and multi‐demand markets is considered. We present equilibrium conditions for decision‐makers in the network and develop a static model with marketable pollution permits and noncompliant behavior, using the variational inequality theory. We provide qualitative analysis of the model. Then, using the projected dynamical system, we propose a dynamic model. The results show that the set of stationary points of dynamic model coincides with the set of solutions of static model. Finally, numerical examples are proposed. The equilibrium results including production output of new products, the forward and reverse product flows, the prices of product, the prices of license, the number of licenses, and the possible noncompliant overflows and underflows of the waste are obtained. We find that increase in the unit penalty cost contributes to decrease in waste emission from firms in the network, and when the unit penalty cost increase to a certain level, they no longer choose excess emission of waste. © 2018 American Institute of Chemical Engineers Environ Prog, 38:e13021, 2019

Remanufacturing Policies Options for a Closed-Loop Supply Chain Network

“…Wang et al [30] provided the CLSC network equilibrium decision-making for retailers who need to recycle used products themselves. Yang et al [31] studied the CLSC network dynamics considering pollution permits. Wu et al [32] analyzed how the government subsidy and the asymmetry of enterprise costs can affect the equilibrium decision-making of the CLSC network.…”

“…Fu et al [37] proposed a CLSC network model dealing with heterogeneous products facing different market demands. Existing research work [23][24][25][26][27][28][29][30][31][32][33][34][35][36][37] not only obtained CLSC network equilibrium decision-making but also analyzed how external factors, such as random demand, manufacturing level, production period, carbon emission, etc., can affect the equilibrium decision-making. However, all these research works only considered the OEMs' self-remanufacturing policy but did not consider their outsourcing remanufacturing policy.…”

“…The reverse flows of CLSC involve used products, which are returned from the demand markets to the original manufacturers or the remanufacturers for recycling. However, existing research on the CLSC network equilibrium problem [22][23][24][25][26][27][28][29][30][31][32][33][34][35][36][37] have not considered the manufacturers' options of remanufacturing their products or outsourcing their products to other manufacturers for remanufacturing. Moreover, the actual production and operation of manufacturing companies may also need to consider thirdparty remanufacturing.…”