The impacts of subsidy policies and transfer pricing policies on the closed-loop supply chain with dual collection channels

Wan, Nana; Hong, Dingjun

doi:10.1016/j.jclepro.2019.03.274

Cited by 112 publications

(59 citation statements)

References 25 publications

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“…to collect used products, where κ > 0 represents the scaling parameter, and $α > 0 represents the monetary benefit's for the consumers for returning used products. If α = 0, this assumption is similar to Ma et al [28], Xiao et al [53], and Wan and Hong [57]. τ j i represents the collection rate (0 ≤ τ j i ≤ 1).…”

Section: Prerequisites and Assumptionsmentioning

confidence: 79%

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Game-Theoretic Analysis to Examine How Government Subsidy Policies Affect a Closed-Loop Supply Chain Decision

Nielsen

Majumder²,

Saha

2019

Applied Sciences

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The pros and cons of government subsidy policies in a closed-loop supply chain (CLSC) setting on optimal pricing, investment decisions in improving product quality, and used product collection under social welfare (SW) optimization goal have not been examined comprehensively. This study compares the outcomes of three government policies under manufacturer-Stackelberg (MS) and retailer-Stackelberg (RS), namely (i) direct subsidy to the consumer, (ii) subsidy to the manufacturer to stimulate used product collection, and (iii) subsidy to the manufacturer to improve product quality. Results demonstrate that the greening level, used product collection, and SW are always higher under the RS game, but the rate of a subsidy granted by the government is always higher under the MS game. Profits for the CLSC members and SW are always higher if the government provides a subsidy directly to the consumer, but productivity of investment in the perspective of the manufacturer or government are less. In a second policy, the government organizations grant a subsidy to the manufacturer to stimulate used product collection, but it does not necessarily yield the desired outcome compared to others. In a third policy, the manufacturer receives a subsidy on a research and development (R&D) investment, but it yields a sub-optimal greening level. This study reveals that the outcomes of subsidy policies can bring benefit to consumers and add a degree of complication for CLSC members; government organizations need to inspect carefully among attributes, mainly product type, power of CLSC members, and investment efficiency for the manufacturer, before implementing any subsidy policies so that it can lead to an environmentally and economically viable outcome.

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Section: Prerequisites and Assumptionsmentioning

confidence: 79%

“…2. It is assumed that re-manufacturing cost is less compared to manufacturing cost, i.e., c r < c m [6,57]. The manufacturer invests CL(τ…”

Section: Prerequisites and Assumptionsmentioning

confidence: 99%

Game-Theoretic Analysis to Examine How Government Subsidy Policies Affect a Closed-Loop Supply Chain Decision

Nielsen

Majumder²,

Saha

2019

Applied Sciences

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“…Zhao et al [43] confirmed that remanufacturers' profits could be improved by subsidy sharing between remanufacturers and consumers. Wan and Hong [7] found that government subsidies will incentivize market demand and benefit CLSC members. Guo et al [44] pointed out that governments should adopt an appropriate subsidy policy to encourage the recovery of returned items.…”

Section: Government Policy Of Closed-loop Supply Chainsmentioning

confidence: 99%

“…Remanufacturing is "the process whereby some components of used products are disassembled, cleaned, reprocessed, inspected, and then reassembled to be used again" [3]. Because of environmental, financial and marketing benefits, both the industry and academia have paid more and more attention to remanufacturing activities [4][5][6][7].…”

Section: Introductionmentioning

confidence: 99%

Optimal Pricing Strategy and Government Consumption Subsidy Policy in Closed-Loop Supply Chain with Third-Party Remanufacturer

et al. 2020

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Due to the increasing awareness of sustainable manufacturing, remanufacturing has been widely accepted by enterprises in many countries. In the process of Closed-Loop Supply Chain (CLSC) development, to stimulate the demand for remanufactured products, the Chinese government’s interventions such as the “Trade old for Remanufactured” program cannot be ignored. However, prior research has not answered the questions of whether governments should offer consumption subsidies and how to determine the optimal subsidy value. This paper investigates the optimal government consumption subsidy policy and its impact on the operation of Closed-Loop Supply Chain (CLSC) where an Original Equipment Manufacturer (OEM) produces new products, while a Third-Party Remanufacturer (TPR) remanufactures the used products collected from consumers. A game model with a leader (government) and two followers (OEM and TPR) is then introduced. The government determines the consumption subsidy to maximize the social welfare, while the TPR and OEM attempt to maximize their own profit functions. Game theoretic models are proposed to explore and compare the scenarios, i.e., CLSC with a consumption subsidy policy and without a consumption subsidy policy. The equilibrium characteristics with respect to the government’s consumption subsidy decisions and the price decisions for chain members are derived. Based on the theoretical and numerical analysis, the results show that: (1) governments should not always offer a consumption subsidy; (2) the consumption subsidy cannibalizes demand for new products while boosting the demand for remanufactured products; (3) the consumption subsidy should be shared between the TPR and consumers when the TPR raises the sales price of remanufactured product; (4) the members of the CLSC do not always benefit from the consumption subsidy policy.

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“…Wan and Hong established a Stackelberg game model under two subsidy modes of government subsidies for remanufacturing and recycling, respectively. The structure involved is a closed-loop supply chain composed of a manufacturer, a retailer, and a recycler [22]. Chen, Dimitrov, and Pun studied a tripartite Stackelberg game model in which manufacturer and retailer jointly invest in product sustainability and therefore enjoy government subsidies.…”

Section: Government Subsidies Based On Technology Investment Of the Gmentioning

confidence: 99%

Closed-Loop Supply Chain Network Equilibrium Model with Subsidy on Green Supply Chain Technology Investment

Zhang

2019

Sustainability

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The green supply chain (GSC) can effectively reduce the waste of resources and avoid environmental pollution. For a closed-loop supply chain network consisting of multiple manufacturers, multiple retailers, and multiple consumer and recycling markets, we assume that retailers are responsible for the recycling of used products, manufacturers use raw materials to produce new products and recycled products for remanufacturing, and government departments subsidize all manufacturers and retailers for GSC technology investment. Then, the equilibrium conditions of manufacturers, retailers, demand markets, and recycling markets are obtained by using the variational inequality method, complementarity theorem, and Nash equilibrium theory, and the variational inequality model of the closed-loop supply chain network multiphase equilibrium is established. Based on numerical simulation, the optimal technology investment decision of green supply chain under different government subsidy rates, and the influence of market structure and enterprise cost asymmetry on the equilibrium solution of supply chain network are analyzed. The results show that government subsidies can effectively promote enterprises to upgrade their level of GSC technology investment. The intensification of enterprise competition and the asymmetry of enterprise costs will affect the composition of enterprise profits and the allocation of profits between enterprises, and the former will weaken the effect of government subsidies.

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The impacts of subsidy policies and transfer pricing policies on the closed-loop supply chain with dual collection channels

Cited by 112 publications

References 25 publications

Game-Theoretic Analysis to Examine How Government Subsidy Policies Affect a Closed-Loop Supply Chain Decision

Game-Theoretic Analysis to Examine How Government Subsidy Policies Affect a Closed-Loop Supply Chain Decision

Optimal Pricing Strategy and Government Consumption Subsidy Policy in Closed-Loop Supply Chain with Third-Party Remanufacturer

Closed-Loop Supply Chain Network Equilibrium Model with Subsidy on Green Supply Chain Technology Investment

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