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Sustainability 2018, 10(9), 3198; https://doi.org/10.3390/su10093198

A Coordinated Revenue-Sharing Model for a Sustainable Closed-Loop Supply Chain

1,2
,
1
,
2
and
3,*
1
School of Traffic and Transportation Engineering, Central South University, Changsha 410075, China
2
School of Business Administration, Hunan University of Finance and Economics, Changsha 410205, China
3
Laboratoire d’optimisation des Systeme Industriels, Institut Charles Delaunay and UMR CNRS 6281, Universite de Technologie de Troyes, 12 Rue Marie Curie, CS 42060, 10004 Troyes CEDEX, France
*
Author to whom correspondence should be addressed.
Received: 1 August 2018 / Revised: 2 September 2018 / Accepted: 4 September 2018 / Published: 7 September 2018
(This article belongs to the Special Issue Sustainable Supply Chain System Design and Optimization)
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Abstract

This study takes a sustainable closed-loop supply chain composed of one manufacturer and two price-competitive retailers as the object and considers the two-way risk aversion characteristics of manufacturers and retailers in examining the coordination mechanism in a closed-loop supply chain. Using game theory, optimal decision-making on wholesale prices, retail prices, and recycling prices are explored under decentralized and centralized decision-making scenarios, and representative expressions are established. By analyzing the effects of the risk aversion coefficient on players’ optimal strategies, we found that the manufacturer’s and retailers’ risk aversion coefficients have different effects on the wholesale price, retail price, and recycling price under decentralized decision-making, while in a centralized decision-making scenario, the effects are the same. The comparison also found that the wholesale price and recovery price under the centralized decision-making scenario are higher than those under decentralized decision-making. To achieve closed-loop supply chain coordination, we propose a revenue-sharing contract that we demonstrate by coordinating price competition with risk aversion and analyze a range of parameters that influence the revenue-sharing contract. The results show that the proposed contract can increase the profits of supply chain members by identifying the optimal revenue-sharing ratio. View Full-Text
Keywords: sustainable closed-loop supply chain; revenue-sharing contract; risk aversion; price competition; simulation analysis; model sustainable closed-loop supply chain; revenue-sharing contract; risk aversion; price competition; simulation analysis; model
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Zou, H.; Qin, J.; Yang, P.; Dai, B. A Coordinated Revenue-Sharing Model for a Sustainable Closed-Loop Supply Chain. Sustainability 2018, 10, 3198.

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