Presenting a Mathematical Model for the Collection and Reproduction of Depreciated Products in a Closed Loop Supply Chain Using the GameTheory

Document Type : Research/ Original/ Regular Article

Authors

1 a. Department of Industrial Engineering, Central Tehran Branch, Islamic Azad University, Tehran. Iran.

2 Department of Industrial Engineering, Central Tehran Branch, Islamic Azad University, Tehran. Iran.

3 a. Department of Industrial Engineering, Central Tehran Branch, Islamic Azad University, Tehran. Iran

Abstract

In the real world, remanufacturing depreciated products for the purpose of cost reduction in supply chains, is recognized as a competitive advantage. In this paper, an appropriate approach for collecting and remanufacturing depreciated products in a closed-loop supply chain is considered with the aim of reducing costs using the Stackelberg game theory. To this end, the considered chain members include the manufacturer, the retailer, and the remanufacture contractor (as the third party to the contract). In this research, the four following scenarios are considered and the results are analyzed: 1) Payment by the manufacturer to collect and reproduce the depreciated product; 2) Joint payment of an amount by the retailer and the manufacturer to collect and reproduce the depreciated product; 3) Joint payment of an amount by the manufacturer and the third party to the contract to collect and reproduce the depreciated product; 4) Payment by the manufacturer for collection and non-reproduction of the product. The computational results show that the chain profit will reach its maximum amount with the optimal reproduction rate considering the third scenario, and the chain members will gain more benefits than other scenarios. The findings of this research indicate that when the reproduction process does not take place, the lowest possible profit is made in the chain. The sensitivity analysis performed by increasing the effect of the final product price on customer demand in different periods, shows a decreasing trend in the three decision variables of final product price, selling price to the retailer, and the amount paid to the customer for each consumed product.

Keywords

Main Subjects

References

  • Blumberg, “Introduction to Management of Reverse Logistics and Closed Loop Supply Chain Processes.” R. ehteshamrasi, Tehran, Aritarin, 2018. (In Persian)
  • H. Yoo, D. Kim, and M.S. Park, “Pricing and return policy under various supply contracts in a closed-loop supply chain.” International Journal of Production Research, vol. 53(1), pp.106-126, 2015.
  • Mahmoudi, Shishebori, A. Sadegheih, “Pricing for a multi-channel supply chain with the participation of a third-party logistics service: A game theory approach.” Iranian Journal of Supply Chain Management, vol. 22(67), pp. 23-34, 2020. (In Persian)
  • Guo and X. Zheng, “Examination of restaurants online pricing strategies: A game analytical approach.” Journal of Hospitality Marketing & Management, vol. 26(6), pp.659-673, 2017.
  • Makui, M. Tajik Jangali, E. Dehghani, “Designing and planning a green closed-loop supply chain network considering a networked commodity and waste collection system (case study: Behran oil company).” Iranian Journal of Supply Chain Management, vol. 22(68), pp. 40-55, 2020. (In Persian)
  • Huang and Z. Wang, “Pricing and production decisions in a closed-loop supply chain considering strategic consumers and technology licensing.” International Journal of Production Research, vol. 57(9), pp. 2847-2866, 2019.
  • Xu, and C. Wang, “Sustainable manufacturing in a closed-loop supply chain considering emission reduction and remanufacturing.” Resources, Conservation and Recycling, vol. 131, pp. 297-304, 2018.
  • C. Bilegan, T. G. Crainic, and Y. Wang. “Scheduled service network design with revenue management considerations and an intermodal barge transportation illustration.” European Journal of Operational Research, 2021.
  • Zhao, F. Wu, T. Jia, and L. Shu, “The impact of product returns on price and delivery time competition in online retailing.” Computers & Industrial Engineering, vol. 125, pp. 658-667, 2018.
  • Chen, and P. C. Bell, “Implementing market segmentation using full-refund and no-refund customer returns policies in a dual-channel supply chain structure.” International Journal of Production Economics, vol. 136(1), pp. 56-66, 2012.
  • Huang, S. M. Choi, W. K. Ching, T. K. Siu, and M. Huang, “On supply chain coordination for false failure returns: A quantity discount contract approach.” International Journal of Production Economics, vol. 133(2), pp. 634-644, 2011.
  • Moghadas Poor and A. Bozorgi, “A closed-loop supply chain network design with considering third party logistics (A case study).” Iranian Journal of Supply Chain Management, vol. 22(66), pp. 75-92, 2020. (In Persian)
  • Soltani Tehrani, M. Mosadegh-Khah, and H. Hassanpour, “Multi-level, multi-product, multi-cycle closed-loop supply chain optimization to reduce supply chain costs.” Iranian Journal of Supply Chain Management, vol. 18(53), pp. 27-36, 2016. (In Persian)
  • Seifbarghy and S. Malekpour Kolbadinejhad, “Development of a closed loop supply chain network considering environmental factors and location-inventory decisions under uncertainty.” Iranian Journal of Supply Chain Management, vol. 22(67), pp. 4-12, 2020. (In Persian)
  • Jin, G. Li and M. Reimann, “Team of rivals: How should original equipment manufacturers cooperate with independent remanufacturers via authorisation?.” European Journal of Operational Research, vol. 296(3), pp. 837-845, 2022.
  • Oraiopoulos, M. E. Ferguson, and L. B. Toktay, “Relicensing as a secondary market strategy.” Management Science, vol. 58(5), pp. 1022-1037, 2012.
  • Atasu, Sarvary, and L. N. Van Wassenhove, “Remanufacturing as a marketing strategy.” Management science, vol. 54(10), pp. 1731-1746, 2008.
  • B. Larsen, D. Masi, D. C. Feibert, and P. Jacobsen, “How the reverse supply chain impacts the firm’s financial performance: A manufacturer’s perspective.” International Journal of Physical Distribution & Logistics Management, 2018.
  • Huang and Z. Wang, “Closed-loop supply chain models with product take-back and hybrid remanufacturing under technology licensing.” Journal of cleaner production, vol. 142, pp. 3917-3927, 2017.

Files

History

  • Receive Date: 22 January 2022
  • Revise Date: 17 February 2022
  • Accept Date: 21 February 2022
  • Publish Date: 22 May 2022

Share

How to cite

Statistics