Decision-Making and Performance Analysis of Closed-Loop Supply Chain under Different Recycling Modes and Channel Power Structures

Abstract

The recycling and remanufacturing of e-waste is linked to a worldwide emphasis on the establishment and implementation of Extended Producer Responsibility system (ERP), which has become an important problem in the process of cycling economy. Meanwhile, with the development and expansion of large-scale retail enterprises, the power structure of supply chain channels is showing a tendency towards diversity as well. However, few studies on closed-loop supply chains (CLSC) have considered both recycling modes and channel power structures. We aim to explore the influence of different recycling modes and channel power structures on the optimal decisions and performance of a closed-loop supply chain (CLSC), considering three recycling channels including manufacturer recycling, retailer recycling and hybrid recycling of retailer and manufacturer and two dominant modes including manufacturer-led and retailer-led. We construct six closed-loop supply chain models under different combinations of three recycling channels and two dominant modes. We analyze the effect of different recycling channels on company decision-making under the same dominant mode, whether participating in recycling has an impact on company decision-making under different dominant modes, and the effect on supply chain members and supply chain system under different dominant modes and recycling channels. The results show that the hybrid recycling strategy is always optimal for both supply chain members; the sub-optimal recycling strategies are both recycled by the subordinate enterprise, and the worst recycling strategies are both recycled by the leading enterprise. Moreover, it is always the worst strategy for manufacturer to participate in a closed-loop supply chain dominated by retailer and recycled by retailer; participating in a closed-loop supply chain dominated by manufacturer and recycled by manufacturer is always the worst strategy for retailer. From a system point of view, system efficiency is the highest under hybrid recycling, and system efficiency is the lowest if leading company recycles separately.