Game Theory Application for Circular Economy Model in Furniture Industry

Abstract

This research proposes a business model for the furniture industry to address the circular economy concept. The circular economy aims to keep resources in use for as long as possible and recover product and material at the end of the life cycle. Game theory is used in this research. The conceptual model proposes rent option, so the end-user is possible to use the furniture in the desired time. Using the rent option to the product could be taken back from the end-user and could be sold or rent it again to another user. The concept of game theory is to formulate and suspect the situations of interaction between players involved, and also decisions taken. Therefore, game theory is used to determine an optimal strategy among players. Player strategies are taken when it has reached the Nash Equilibrium. The proposed model consists of 4 parties, such as the furniture industry, remanufacturer, distributor, and end-user. The payoff is determined for every player to observe each player’s profit in addressing CE. Based on the result, there is one strategy that reached the Nash equilibrium. We also picked out 3 of 162 possible plan that gives the best advantages for all players. Each strategy contains players’ prices decision, and for the end-user decision is the length of rent.

Circular Economy Designing of Municipal Waste Cooking Oil: A Case Study of Semarang City, Indonesia

“…(3) (4) (5) Eqs (3), (4), and (5) state that Xj, aij, and Yi are binary delimiters. Another equation used is the equation for calculating the capacity of a collection channel, which is written in Eq.…”

“…Studies on the CE framework have been growing since the sustainable development goals (SDGs) were endorsed. Previous researchers have studied CE in the furniture industry [3][4][5][6]. Many studies on plastic products and its relation to CE have also been carried out [7][8][9][10] as well as studies related to CE on electronic products [8,11,12].…”

Circular economy-based product substitution design rationale: A case of personal care product

“…Several studies related to CE in the furniture industry have been conducted. Those studies include barriers and drivers (Barbaritano, Bravi & Savelli, 2019); challenges and opportunities (Oliveira, França & Rangel, 2018); business model (Wicaksono, Hartini, Sutrisno & Nabila, 2020); the relationship between environmental-oriented supply chain cooperation on the CE-targeted performances (Susanty, Tjahjono, and Sulistyani, 2020); and strategy to reduce wood waste (Hartini, Wicaksono, Rizal & Hamidi, 2021). Empirical studies of the potential waste from the furniture production process and the challenges of utilizing the waste in a circular economy are still rarely conducted.…”

Upcycle strategy on tree branches to improve eco-efficiency towards a circular economy using life cycle assessment

“…Several studies on circular economy in the furniture industry have been carried out previously. There are investigations about Circular Economy practices, barriers, and drivers of CE [10]), the challenges and opportunities [11], the design of a business model [12], the relationship between varying ESCC practices on the CE-targeted performances [13], and the strategy to reduce wood waste [8]. Empirical studies of using tree waste as raw material for furniture products in a circular economy perspective are still rarely carried out.…”