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

2019 ◽  
Vol 10 (1) ◽  
pp. 145 ◽  
Author(s):  
Izabela Ewa Nielsen ◽  
Sani Majumder ◽  
Subrata Saha
Keyword(s):  
Supply Chain ◽  
Product Quality ◽  
Closed Loop ◽  
Investment Efficiency ◽  
Government Subsidy ◽  
Closed Loop Supply Chain ◽  
Government Organizations ◽  
Game Theoretic Analysis ◽  
Game Theoretic ◽  
The Government

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.

scholarly journals Research on Closed-Loop Supply Chain Decision-Making in Different Cooperation Modes with Government’s Reward-Penalty Mechanism

2021 ◽  
Vol 13 (11) ◽  
pp. 6425
Author(s):  
Quanxi Li ◽  
Haowei Zhang ◽  
Kailing Liu
Keyword(s):  
Supply Chain ◽  
Closed Loop ◽  
Stackelberg Game ◽  
Recycling Rate ◽  
Transfer Payment ◽  
Closed Loop Supply Chain ◽  
Asymmetry Of Information ◽  
Optimal Decisions ◽  
The Government ◽  
The Impact

In closed-loop supply chains (CLSC), manufacturers, retailers, and recyclers perform their duties. Due to the asymmetry of information among enterprises, it is difficult for them to maximize efficiency and profits. To maximize the efficiency and profit of the CLSC, this study establishes five cooperation models of CLSC under the government‘s reward–penalty mechanism. We make decisions on wholesale prices, retail prices, transfer payment prices, and recovery rates relying on the Stackelberg game method and compare the optimal decisions. This paper analyzes the impact of the government reward-penalty mechanism on optimal decisions and how members in CLSC choose partners. We find that the government’s reward-penalty mechanism can effectively increase the recycling rate of used products and the total profit of the closed-loop supply chain. According to the calculation results of the models, under the government’s reward-penalty mechanism, the cooperation can improve the CLSC’s used products recycling capacity and profitability. In a supply chain, the more members participate in the cooperation, the higher profit the CLSC obtain. However, the cooperation mode of all members may lead to monopoly, which is not approved by government and customers.

scholarly journals Game Theoretic Analysis of After-Sales Service in Two-Echelon Supply Chain with Warranty Sensitive Demand

2020 ◽  
Vol 2020 ◽  
pp. 1-10
Author(s):  
Yuqing Qi ◽  
Jing Wu ◽  
Tiandongjie Zhao ◽  
Yuling Sun ◽  
Bin Wu
Keyword(s):  
Supply Chain ◽  
Product Quality ◽  
Numerical Study ◽  
Profit Margin ◽  
Theoretic Analysis ◽  
Service Contract ◽  
Game Theoretic Analysis ◽  
Game Theoretic ◽  
Free Replacement ◽  
Warranty Length

After-sales service contract is widely popular in business. Although both the cases of manufacturer offering warranty and retailer offering warranty are common in market, the differences between them have been few studied. In this paper, we build a two-echelon supply chain in which a manufacturer produces limit quality products and sells them to a retailer. To promote sales, the manufacturer or retailer offers a free-replacement warranty to the customers. Customer’s demand is affected by the warranty length. We investigate the game relationships between the supply chain members. We find that the warranty length negatively relates to the product quality in both the manufacturer offering warranty case and the retailer offering warranty case. When retailer’s profit margin is not low, the retailer offers a longer warranty than the manufacturer and vice versa. Profit of the supply chain is also analyzed along with a numerical study.

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

2020 ◽  
Vol 12 (6) ◽  
pp. 2411 ◽  
Author(s):  
Lijun Meng ◽  
Qiang Qiang ◽  
Zuqing Huang ◽  
Baoyou Zhang ◽  
Yuxiang Yang
Keyword(s):  
Supply Chain ◽  
Closed Loop ◽  
New Products ◽  
Sustainable Manufacturing ◽  
Third Party ◽  
Government Consumption ◽  
Closed Loop Supply Chain ◽  
Subsidy Policy ◽  
Optimal Pricing Strategy ◽  
The Government

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.

scholarly journals Multi-Period E-Closed-Loop Supply Chain Network Considering Consumers’ Preference for Products and AI-Push

2019 ◽  
Vol 11 (17) ◽  
pp. 4571 ◽  
Author(s):  
Duan ◽  
Xiu ◽  
Yao
Keyword(s):  
Supply Chain ◽  
Environmental Protection ◽  
Closed Loop ◽  
Supply Chain Network ◽  
Economic Interests ◽  
Closed Loop Supply Chain ◽  
Protection Measures ◽  
Management Level ◽  
The Government ◽  
Dual Objectives

The remanufacturing industry plays a significant role to improve the utilization of resources and contribute to environmental protection and sustainable development. E-commerce channel (e-channel) has become an important retail channel. The multi-period closed-loop supply chain network of electronic channels (E-CLSCN) is studied. Moreover, this study considers the influence of consumers’ preference for products and artificial intelligence push (AI-push) on network balance under the conditions of dynamic and static. The network consists of manufacturers, remanufacturers, and demand markets. Remanufacturers are responsible for collecting and remanufacturing. The multi-period E-CLSCN model is established through variational inequalities. The study finds that whether dynamic or static, consumers’ preference for new products (NP) has positively correlated with the profits of manufacturers and the whole E-CLSCN. Consumers’ preference for remanufacturer products (RP) has only positively correlated with the profits of remanufactures. In the aspect of AI-push, the manufacturers’ AI-push has positively correlated with the profits of the entire players of E-CLSCN, while the remanufacturers’ AI-push has only positively correlated with the profits of the remanufacturers. Also, considering the multi-period, the sensitivity of the demand markets for the investment of manufacturers’ and remanufacturers’ AI-push gradually reduces, and the marginal benefit of AI-push gradually decreases. Finally, this paper addresses interesting managerial insights from the perspective of government and enterprises. Under the dual objectives of environmental protection and economic interests of enterprises, this study provides a reference for governments and enterprises to develop relevant dynamic policies. Namely, the government formulates dynamic environmental protection measures, and enterprises formulate dynamic strategic plans and implement government policies. While promoting the management level of E-CLSCN, it effectively boosts the development of the remanufacturing industry and recycling sustainable economy.

scholarly journals Closed-Loop Supply Chain Coordination under a Reward–Penalty and a Manufacturer’s Subsidy Policy

2020 ◽  
Vol 12 (22) ◽  
pp. 9329
Author(s):  
Sungki Kim ◽  
Nina Shin ◽  
Sangwook Park
Keyword(s):  
Supply Chain ◽  
Environmental Sustainability ◽  
Closed Loop ◽  
Supply Chain Coordination ◽  
Supply Chain Collaboration ◽  
Closed Loop Supply Chain ◽  
Subsidy Policy ◽  
Collection Rate ◽  
Game Theoretic ◽  
Recyclable Resources

Government legislation significantly impacts closed-loop supply chain (CLSC) operations. This study examines the collection rate of and decisions on the product greening improvement level in a three-level CLSC with the government’s reward–penalty and a manufacturer’s subsidy policy. Four game-theoretic models are analyzed in order to evaluate the ways in which the policy and revenue-sharing contracts (RSCs) between the manufacturer and retailer affect the CLSC members’ optimal decisions and profits. We found that a reward–penalty and subsidy policy raise the collection rate, as well as the product greening improvement level. A manufacturer’s financial conflict of interest can be mitigated using RSCs. The RSCs between the manufacturer and the retailer also increase the profit of a recycling company that successfully coordinates the CLSC. An interesting result is that, when the RSCs are used under the subsidy policy, the collection rate is higher than it is in a centralized model. We also found that the subsidy level needs to be adjusted according to the price of the recycling resources, and that increasing the value of the recyclable resources and lowering the recycling costs in the early stages of the supply chain collaboration could lead to higher environmental sustainability. These results illustrate that using an RSC can effectively coordinate the CLSC, and can thus help policy implementation by governments.

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