Optimal Government Subsidy Decision and Its Impact on Sustainable Development of a Closed-Loop Supply Chain

Abstract

Government subsidies generally play an important role in the sustainable operations management of a closed-loop supply chain (CLSC). This paper investigates the optimal government subsidy decision and its influence on the sustainable development of the CLSC, consisting of one manufacturer, one retailer, and one third-party collector, from the economic, environmental, and social perspectives. Based on game analysis technology, different Stackelberg game models among the government and the CLSC members are formulated to analyze the optimal decisions under different power structures. By conducting theoretic comparative and sensitivity analyses and a case study, the effects of the government subsidy and the power structure are explored from the total profit, environmental benefit, and social welfare. Results show that the subsidy is good for sustainable development of the CLSC, which improves the total profit of the CLSC members, environmental benefit, and social welfare and the improvement effect is more prominent when the CLSC members have unequal bargaining power. Moreover, according to the growth proportion of profit, the retailer and collector benefit more from the subsidy among the CLSC members when they have different bargaining power, otherwise, the CLSC members benefit equally from the subsidy, and the subsidy is more beneficial to the environment compared with the total supply chain profit and social welfare.

Game Models for Ordering and Channel Decisions of New and Differentiated Remanufactured Products in a Closed-Loop Supply Chain with Sales Efforts

“…Some studies in the literature assume that in a CLSC, remanufactured and new products are not distinguishable [2,6], while others hold that remanufactured products are different from new products [7,8]. In either case, especially the latter, according to product cannibalization, remanufacturing products leads to reductions in the sales volume, sales revenue, or market share of new products.…”

“…The manufacturer provides two types of products with unit wholesale prices, denoted as w n , w r (w n > w r ), to the retailer. The retailer is tasked with selling both types of products at different prices p n , p r (p n > p r ), based on which the remanufactured products are clearly different from the new product [1,2]. In order to enhance the perception of remanufactured products and positively influence the market demand, the retailer pays for a certain amount of sales activities, such as advertising, promotion, and service commitment.…”

“…Remanufacturing after the recycling of waste tires, electronic products, and automobile engines can effectively reduce the use of raw materials by more than 30% and energy consumption by more than 15%. Apple reduced their carbon emissions per dollar of revenue by 15.4% through remanufacturing; Canon and Xerox saved millions of dollars by recycling and remanufacturing [2]. Both economic and noneconomic factors promote the implementation of recycling and remanufacturing, while economic benefits may be the key factor that attracts enterprises [3].…”

Pricing Decisions for Power Battery Closed-Loop Supply Chains with Low-Carbon Input by Echelon Utilization Enterprises

“…This work also illustrates that government subsidies play a positive role in promoting recycling and the remanufacturing intentions of remanufacturers and recyclers [10]. Regarding the closed-loop supply chain under the implementation of reward and punishment measures by the government, we refer to the following literature: Yujie Gu et al studied the optimal decision-making of government subsidies and its impact on sustainable development in the supply chain consisting of manufacturers, retailers and third-party collectors from economic, environmental and social perspectives [11]. Mirzaee H et al considered a closed-loop supply chain that includes riskaverse manufacturers and risk-averse retailers under the supervision of carbon tax.…”

Game Models for Ordering and Channel Decisions of New and Differentiated Remanufactured Products in a Closed-Loop Supply Chain

“…Remanufacturing after recycling of waste tires, electronic products and automobile engines can effectively save more than 30% of raw materials and reduce energy consumption by more than 15%. Apple reduced carbon emissions per dollar of revenue by 15.4% through remanufacturing; Canon and Xerox saved millions of dollars by recycling and remanufacturing [2]. Both economic and non-economic factors promote the implementation of recycling and remanufacturing, while economic benefits may be the key factor that attracts enterprises [3].…”