The choice of the collection channel in a WEEE closed-loop supply chain with government subsidy

Abstract

Purpose – The managerial questions of this paper are as follows: What are the equilibrium conditions of transfer price, quantity and profits when considering dynamic subsidies from the government? Which collection channel is better for a manufacturer, direct collection by itself or through an online platform? Design/methodology/approach – This research investigates the three collection models: the manufacturer-driven model, the online platform-driven model and the competitive model. Based on the differential game, this research explores the transfer price, collection cost, subsidy and manufacturer and online platform profit in different models when considering the dynamic subsidy. Findings – The results show that the collection strategy for the manufacturer depends on its collection cost. If the collection cost is lower, then the manufacturer may prefer to collect by itself. When the collection cost meets a certain range, the manufacturer may collect the used product through an online platform. The online platform-driven model is the most efficient because both the manufacturer and the online platform can make a higher profit. Originality/value – This research bridges the gap between waste electrical and electronic equipment collection and government subsidies by demonstrating the dynamic condition of subsidies. It offers an approach to address the influence of dynamic subsidy, which can provide practical insights for the government implementing the subsidy policy.

Keywords

• WEEE collection
• O2O
• Differential game
• China