Alexandria Engineering Journal (Mar 2025)
Research on pricing coordination strategy of closed-loop supply chain based on recycling quality grading under government participation
Abstract
A closed-loop supply chain model incorporating government involvement has been developed to optimize the utilization of waste products, quantifying the quality level of such products. The utilization of game theory within the model allows for an examination of how government incentives and penalties for remanufacturing impact pricing decisions within the closed-loop supply chain. Additionally, a profit coordination contract has been proposed to enhance supply chain profits in decentralized decision-making environments. The findings indicate that: (1) Amid uncertainties in recycling quality, recycling price of retailers, buyback price of manufacturers, recycling quantity, recycling rate, and the profitability of supply chain node enterprises exhibit negative correlations with the remanufacturing quality threshold. A lower threshold for remanufacturing quality can increase the enthusiasm of retailers for recycling and manufacturers for remanufacturing. (2) The increase in government incentives and punishments for remanufacturing will lead to a decrease in the profit of the supply chain. Centralized decision-making yields superior equilibrium solutions for recycling price of retailers, buyback price of manufacturers, and new product quantities compared to decentralized approaches. (3) Regulatory policies aimed at incentivizing remanufacturing rates influence pricing and demand for supply chain products. Government incentives and penalties exert significant influence on enhancing recovery rates. Therefore, it is advisable for the government to adopt suitable standards for remanufacturing incentives and penalties, while enterprises should bolster research, development, and investment in remanufacturing technology to enhance remanufacturing capabilities and stimulate the production of more recycled products, thereby ameliorating resource recycling and mitigating environmental risks.
