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

Quanxi Li, Haowei Zhang and Kailing Liu
Additional contact information
Quanxi Li: School of Management, Jilin University, Changchun 130022, China
Haowei Zhang: School of Management, Jilin University, Changchun 130022, China
Kailing Liu: School of Management, Jilin University, Changchun 130022, China

Sustainability, 2021, vol. 13, issue 11, 1-22

Abstract: 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.

Keywords: closed-loop supply chain; government’s reward-penalty mechanism; Stackelberg game; cooperation model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.mdpi.com/2071-1050/13/11/6425/pdf (application/pdf)
https://www.mdpi.com/2071-1050/13/11/6425/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:11:p:6425-:d:569210

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().