Game Analysis and Coordination of a Closed-Loop Supply Chain: Perspective of Components Reuse Strategy

Xiaomin Zhao, Xueli Bai, Zhihui Fan and Ting Liu
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Xiaomin Zhao: School of Management, Shanghai University, Shanghai 200444, China
Xueli Bai: School of Management, Shanghai University, Shanghai 200444, China
Zhihui Fan: School of Management, Shanghai University, Shanghai 200444, China
Ting Liu: School of Management, Shanghai University, Shanghai 200444, China

Sustainability, 2020, vol. 12, issue 22, 1-19

Abstract: This paper studies a closed-loop supply chain that covers three key members: Manufacturer, new components supplier, and recycled-components supplier. Considering the power of each member in the chain, we use game theory to analyze the optimal decision and coordination, particularly investigating the economic value of components reuse strategy. The results show that, in a decentralized setting, the value of components reuse highly depends on the attributes of the products. For the products with low price elasticity, reuse strategy is only beneficial to the recycled-components suppliers. Further investigation shows the manufacturer can use wholesale price contracts to coordinate and improve the supply chain’s performance.

Keywords: components reuse strategy; closed-loop supply chain; dual sourcing; coordination (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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