Author(s)

Shuying Wang, Qijing Yang

Corresponding Author

Qijing Yang

Abstract

For a simple three-stage closed-loop supply chain, each participant has an independent competitive goal, yet each part’s being profitable doesn’t foretell a optimal result for the whole. This paper aims to reshape the supply-retail-recycle pricing model by taking the extended producer responsibility into consideration. Based on the analysis of EPR and supply chain coordination theory, it is proposed that centralized decisions are better than decentralized ones, and revenue-sharing contracts contribute to achieve supply chain coordination holding the premise of decentralized decision-making. Furthermore, a simulation study run by Matlab is arranged to test these views, of which the results show that the optimal profit of supply chain under centralized decision is higher than under decentralized decision, for in the former case, both the recycling price of recyclers and the utilization rate of waste products are improved, besides, the total profit of the supply chain and every part of it increase. Therefore, by designing reasonably revenue-sharing contracts, supply chain coordination can be effectively achieved, every participant tends to proactively obey contracts and shall expect increasing profits at the same time.

Keywords

Extended producer responsibility; Three-stage closed-loop supply chain; Revenue sharing contract; Supply chain coordination