Due to the increasing awareness of sustainable manufacturing, remanufacturing has been widely accepted by enterprises in many countries. In the process of Closed-Loop Supply Chain (CLSC) development, to stimulate the demand for remanufactured products, the Chinese government’s interventions such as the “Trade old for Remanufactured” program cannot be ignored. However, prior research has not answered the questions of whether governments should offer consumption subsidies and how to determine the optimal subsidy value. This paper investigates the optimal government consumption subsidy policy and its impact on the operation of Closed-Loop Supply Chain (CLSC) where an Original Equipment Manufacturer (OEM) produces new products, while a Third-Party Remanufacturer (TPR) remanufactures the used products collected from consumers. A game model with a leader (government) and two followers (OEM and TPR) is then introduced. The government determines the consumption subsidy to maximize the social welfare, while the TPR and OEM attempt to maximize their own profit functions. Game theoretic models are proposed to explore and compare the scenarios, i.e., CLSC with a consumption subsidy policy and without a consumption subsidy policy. The equilibrium characteristics with respect to the government’s consumption subsidy decisions and the price decisions for chain members are derived. Based on the theoretical and numerical analysis, the results show that: (1) governments should not always offer a consumption subsidy; (2) the consumption subsidy cannibalizes demand for new products while boosting the demand for remanufactured products; (3) the consumption subsidy should be shared between the TPR and consumers when the TPR raises the sales price of remanufactured product; (4) the members of the CLSC do not always benefit from the consumption subsidy policy.

A closed‐loop supply chain network including multi‐manufacturing/remanufacturing firms and multi‐demand markets is considered. We present equilibrium conditions for decision‐makers in the network and develop a static model with marketable pollution permits and noncompliant behavior, using the variational inequality theory. We provide qualitative analysis of the model. Then, using the projected dynamical system, we propose a dynamic model. The results show that the set of stationary points of dynamic model coincides with the set of solutions of static model. Finally, numerical examples are proposed. The equilibrium results including production output of new products, the forward and reverse product flows, the prices of product, the prices of license, the number of licenses, and the possible noncompliant overflows and underflows of the waste are obtained. We find that increase in the unit penalty cost contributes to decrease in waste emission from firms in the network, and when the unit penalty cost increase to a certain level, they no longer choose excess emission of waste. © 2018 American Institute of Chemical Engineers Environ Prog, 38:e13021, 2019

No abstract

No abstract

No abstract