Joint Capacity Investment, Collecting and Pricing Decisions in a Capacity Constraint Closed-Loop Supply Chain Considering Cooperation

Abstract

In this paper, a closed-loop supply chain (CLSC) consisting of one manufacturer and one supplier is considered. The capacity of the manufacturer is limited, the manufacturer can increase capacity by investing in capacity, and there are different cooperation contracts among the supply chain members. This paper pushes collecting activities upstream, assumes that the collecting activity can be completed by the supplier, and accepts that there is cooperation between the members, which increases supplier involvement. Dynamic game models among CLSC members are formulated. The optimal decisions of pricing, capacity investment, and collecting channels of the CLSC members are obtained, and the impacts of some important factors, for example, the capacity investment cost coefficient and the cost-sharing factors, on optimal decisions are investigated. The results reveal that the supplier collecting mode performs better in some scenarios; therefore, the management enlightenment desired by the supplier can be obtained. Additionally, the coordination between the manufacturer and the supplier sometimes fails to increase the closed-loop supply chain’s sustainability, which is a finding quite different from some current research results.

Optimal Decisions in the Closed‐Loop Supply Chain considering Capacity Constraints and Stochastic Demand under the Cap‐and‐Trade Regulation

“…Across the six models, the overall CLSC returns decrease as market price sensitivity increases. A comparison of the CLSC returns in the different scenarios shows that the CLSC returns in the supplier recovery model are higher than those in the manufacturer recovery model, that is, 22 Complexity can better meet market demand and bring positive benefits to CLSCs.…”

“…e most available pricing and collection decisions of study members were examined. Wang and Shao [22] discussed capacity investment decisions under the manufacturer's capacity constraints and examine the issue of coordination contracts among members.…”