Dual recycling channel strategy of closed-loop supply chain based on stackelberg theory

Abstract

Under the background of promoting recycling economy, the economic and environmental benefits of remanufacturing used products have become heat topic. In this paper, Stackelberg game theory is used to study the closed-loop supply chain models under Dual Channel Recovery concerning manufacturer and retailers. Based on the game theory, we characterize the supply chain performance in terms of recycling strategies for both the decentralized and centralized channel scenarios in which contains a consumer, a retailer, a manufacturer. Then Hessian matrix is used to find optimal result. By comparing the two models, the study found that the total supply chain profits in centralized channel scenario are greater than that in decentralized one under the same condition.