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Sustainability 2017, 9(11), 2004; doi:10.3390/su9112004

Dual-Recycling Channel Decision in a Closed-Loop Supply Chain with Cost Disruptions

School of Management, Huazhong University of Science and Technology, Wuhan 430074, China
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Received: 11 October 2017 / Revised: 29 October 2017 / Accepted: 31 October 2017 / Published: 3 November 2017
(This article belongs to the Special Issue Sustainable Supply Chain System Design and Optimization)
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Abstract

This paper investigates cost disruptions of new and remanufactured products in a closed-loop supply chain where a manufacturer and a third-party collector recycle used products through online-recycling and offline-recycling channels, respectively. We use a Stackelberg game to acquire the equilibrium decisions of dual-recycling and single-recycling channels and analyze how cost disruptions affect the manufacturer’ production and collection strategies. We show that, cost disruption of new products produces a positive impact whilst the remanufacturing cost disruption has a negative impact on collection quantity of used products and negative cost disruptions of both new and remanufactured products could be profitable to the manufacturer. As for the manufacturer’s channel choice, the dual-recycling channel dominates single-recycling channels when new product cost faces positive disruption, because the manufacturer acts as both a buyer and a competitor to the collector and can determine an appropriate acquisition price and transfer price to coordinate the online-offline recycling channel. While if cost disruption of new products is negative, the manufacturer prefers the dual-recycling channel instead of single-recycling channels only if the remanufacturing cost faces large size of negative disruption. View Full-Text
Keywords: closed-loop supply chain; remanufacturing; dual-recycling; cost disruption; game theory closed-loop supply chain; remanufacturing; dual-recycling; cost disruption; game theory
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Huang, Y.; Wang, Z. Dual-Recycling Channel Decision in a Closed-Loop Supply Chain with Cost Disruptions. Sustainability 2017, 9, 2004.

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