Recycling Pricing and Government Subsidy Strategy for End-of-Life Vehicles in a Reverse Supply Chain under Consumer Recycling Channel Preferences

Abstract

In the existing recycling system for end-of-life vehicles (ELVs), online recycling based on the Internet platform is a useful supplement. In this paper, a Stackelberg game pricing model, which is dominated by ELV part remanufacturers and composed of remanufacturers, recyclers, and consumers, is constructed considering consumer preferences for recycling channels. The influence of different subsidy strategies on the optimal pricing, profit, and recycling volume of the reverse supply chain (RSC) of ELVs is discussed, and the effects of factors such as subsidy amount and consumer preferences on the RSC of ELVs are analyzed using numerical simulation. The results show that the increase in consumers’ online recycling preferences has a positive effect on the recycling volume and profit of the RSC of ELVs. Considering the recycling volume of the RSC, when fewer subsidies are given, more recycling volume can be generated by subsidizing remanufacturers, and, on the contrary, recycling volume will be generated by subsidizing consumers. Considering the profit of the RSC, when subsidies are given at the lower-middle level, higher profits can be earned by subsidizing remanufacturers, and, on the contrary, higher profits can be earned by subsidizing consumers.

Keywords

• reverse supply chain management
• dual recycling channels
• Stackelberg game
• consumer preferences
• government subsidy