Impact of Government Environmental Regulations on Remanufacturing Supply Chain with Multi-Subject Responsibility for Recycling and Disposal

Abstract

With the emergence of a large number of waste electronic products and the enhancement of social awareness of environmental protection, the recycling of waste electronic products has become one of the pressing issues of social concern. Government environmental regulation is an important policy to promote the development of the remanufacturing industry. In this paper, we study the government levies recycling and disposal fees on original products for environmental governance and establish two game models based on the perspective of maximizing social welfare with no government regulation and a tripartite liability system. The optimal decisions on wholesale, retail prices and quantity of original and remanufactured products, as well as the recycling and disposal fee are analyzed under both models. Based on the numerical results, the impact of the main parameter (such as the responsibility sharing ratio) on the decisions and profits of the parties is discussed. The results show that (1) the wholesale and retail prices of remanufactured products are not affected by government regulation; (2) the tripartite liability system can increase the output of remanufactured products and reduce the output of original products while cutting the profits of remanufacturing supply chain members, and increasing social welfare; (3) government’s optimal recycling and disposal fee is not related to the sharing ratio. The study can provide practitioners with suggestions for ways to develop environmental regulation.

Keywords

• recycling and disposal
• tripartite liability system
• remanufacturing supply chain
• government environmental regulations
• Stackelberg game