Optimal Operation for Green Supply Chain with Quality of Recyclable Parts and Contract for Recycling Activity

Abstract

This study discusses a contract to promote collection and recycling of used products in a green supply chain (GSC). A collection incentive contract is combined with a reward-penalty contract. The collection incentive contract for used products is made between a retailer and a manufacturer. The reward-penalty contract for recycling used products is made between a manufacturer and an external institution. A retailer pays an incentive for collecting used products from customers and delivers them to a manufacturer with a product order quantity under uncertainty in product demand. A manufacturer remanufactures products using recyclable parts with acceptable quality levels and covers a part of the retailer's incentive from the recycled parts by sharing the reward from an external institution. Product demand information is assumed as (i) the distribution is known (ii) mean and variance are known. Besides, the optimal decisions for product quantity, collection incentive of used products and lower limit of quality level for recyclable parts under decentralized integrated GSCs. The analysis numerically investigates how (1) contract for recycling activity, (ii) product demand information and (iii) quality of recyclable parts affect the optimal operation for each GSC. Supply chain coordination to shift IGSC is discussed by adopting Nash Bargaining solution.

Modeling green supply chain coordination: current research and future prospects

“…This is apparently because NB theory is advantageous for distributing profit in the cooperative game (Xia and He, 2014; Ghosh and Shah, 2012). In the GSCC literature NB models have been extensively adopted to simulate situations where two players cooperatively decide on how the surplus generated by their interaction should be divided (Cao and Zhang, 2013; Ye et al , 2016; Kusukawa and Alozawa, 2015; Sheu, 2011; Sheu and Chen, 2012; Xiao et al , 2016; Yenipazarli, 2016; Zhang et al , 2017; Lukas and Welling, 2014). All of these studies are based on a dyadic SC structure and adopt NB to distribute the incremental profit of the system between the players in perfect information static game.…”

“…It should be noted that some studies incorporate green burden in the form of green advertising effort (Ülkü and Hsuan, 2017; De Giovanni, 2014; El Saadany et al , 2011; Basiri and Heydari, 2017; Xia and He, 2014). A few studies also incorporate quality dependent demand functions (Watanabe et al , 2013; Watanabe and Kusukawa, 2014; Kusukawa and Alozawa, 2015). To the best of our knowledge other demand models like rebate dependent, lead time-dependent and space dependent demand functions have not been studied in the literature.…”

Price and capacity strategies in the express delivery supply chain: advanced payment, penalty or time insurance contracts

“…Pricing strategies Capacity strategies Insurance contract Erkoc et al [9] × × Guo and Wu [11] × × Qin et al [29] × × Zhang et al [43] × × Liu et al [23] × × Chen et al [5] × × Lukas et al [24] × × Roels and Tang [33] × × Tavakoli and Taleizadeh [36] × × Kusukawa and Alozawa [16] × × Our study a reward-penalty contract to promote the collection and recycling of used products in a green supply chain [16]. Lin et al analyzed an insurance contract in which the supplier shares the risk of overstock and understock with the retailer [17].…”

Optimal Operation for Reverse Supply Chain Incorporating Inspection Policy into Remanufacturing of Used Products

“…The reverse chains/logistics consists of the flows from collection of used products through recycling parts from the used products to reuse the recycled parts. Theoretical analyses and the marginal insights obtained from numerical examples on the reverse chains/logistics are discussed in the following previous papers: Aras et al (2004), Behret and Korugan (2009), Ferguson et al (2009), Fleischman et al (1997, Guide (2000), Guide and Wassenhove (2001), Inderfurth (2005), Konstantaras et al (2010), Kusukawa and Akizawa (2015), Nenes et al (2010), Pochampally et al (2009), Pokharel and Liang (2012), Savaskan and Van Wassenhove (2006), Tang and Teunter (2006), Teunter and Flapper (2011), Watanabe and Kusukawa (2014), Watanabe et al (2013), Wei et al (2011), Wu (2012), Zhang et al (2014).…”