The effects of government subsidies on decentralised reverse supply chains

I-Hsuan Hong, Pin-Chun Chen and Hsien-Ting Yu

International Journal of Production Research, 2016, vol. 54, issue 13, 3962-3977

Abstract: This paper examines the impacts of exogenous government subsidies on recycled material flows in decentralised reverse supply chains where players behave according to their own interests. We present a four-tiered network equilibrium model consisting of the sources of electronic scrap products and the collectors, processors and demand markets. We mathematically transform the players’ optimality conditions governing players’ behaviours into a variational inequality formulation. We investigate the impact of alternate schemes of government subsidies on the equilibrium amount, subsidy effectiveness and subsidy elasticity. The real-world case study shows that subsidising the tier of processors demonstrates the superiority of the investigated performance measures.

Date: 2016
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DOI: 10.1080/00207543.2016.1167982

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