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

Haixiang Wu, Bing Xu and Ding Zhang
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Haixiang Wu: School of Management, Nanchang University, Nanchang 330031, China
Bing Xu: School of Management, Nanchang University, Nanchang 330031, China
Ding Zhang: School of Business, State University of New York, Oswego, NY 13126, USA

Sustainability, 2019, vol. 11, issue 16, 1-26

Abstract: 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.

Keywords: closed-loop supply chain network; GSC technological investment; government subsidy; equilibrium model; variational inequality (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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