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Coordinating a closed-loop supply chain with fairness concerns through variable-weighted Shapley values

Xiao-Xue Zheng, Deng-Feng Li, Zhi Liu, Fu Jia and Jiuh-Biing Sheu

Transportation Research Part E: Logistics and Transportation Review, 2019, vol. 126, issue C, 227-253

Abstract: This paper considers a closed-loop supply chain (CLSC) structure in which a manufacturer allows a retailer and a third-party remanufacturer to sell and remanufacture his products, respectively. Given the retailer’s distributional fairness concerns, we investigate the optimal/equilibrium decisions and profits under five non-cooperative and cooperative game models, and focus on how to allocate maximum profit in a centralized setting. Based on the classic Shapley value, we propose an innovative weighted allocation approach-namely, the variable-weighted Shapley value-to coordinate this CLSC. Numerical studies demonstrate that when remanufactured products are lowly accepted by consumers, our model outperforms the classic Shapley value.

Keywords: Closed-loop supply chain; Remanufacturing outsourcing; Cooperative game; Fairness concerns; Coordination; Shapley value (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.tre.2019.04.006

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