Recycling/Production and Incentive-Penalty Strategies in Closed-Loop Supply Chains under Remanufacturing Policies

Abstract

In light of resource scarcity and environmental challenges, remanufacturing bolsters resource efficiency and fosters a circular economy, with policy support being pivotal for its development. Although previous studies have predominantly concentrated on the economic benefits of remanufacturing, comparatively less emphasis has been placed on its carbon emissions and the differentiated incentive-penalty policies for various recycled products. Our objective is to evaluate the impact of remanufacturing policies, such as carbon taxes and incentive-penalty schemes, on multi-period hybrid manufacturing/remanufacturing closed-loop systems, considering different carbon emissions for new and remanufactured products. We investigate optimal recycling and production strategies for enterprises under two distinct quality distributions (exponential and normal) and analyze the government’s incentive and penalty amounts for recycled products at various quality levels. In order to ensure the robustness of the variable quality distribution, we employ a genetic algorithm and a particle swarm optimization algorithm for comparative verification and problem solving. The study’s findings reveal that: (1) irrespective of the quality distribution, enterprises consistently exhibit a preference for recycling products of the same quality level, and the range of quality for which the government offers incentives or imposes penalties remains fundamentally constant; (2) subsidies may be granted for recycled products with a quality level ranging from 0.2 to 0.4, whereas recycled products with a quality level exceeding 0.4 are subject to penalties.