A sustainable closed-loop supply chain decision mechanism in the electronic sector

Abstract

In a closed-loop supply chain for electronic products, the manufacturer's priority is to enhance the residual value of the collected end-of-use product and decide whether to outsource this business to a retailer, a third-party service, or retain it exclusively. In this paper, we constructed three models to study the decision mechanism in a closed-loop supply chain, with different players selected to collect the used product. By comparing the three models, we characterized the conditions under which the manufacturer will benefit most, and we then aimed to determine the best choice for the manufacturer. Our findings show that, when the retailer and the third-party service provider provide equal performance in collecting the used product, the manufacturer will give priority to the third-party service provider if they choose to outsource this business. If the reverse flows managed by the retailer result in a higher payoff for the manufacturer, then the manufacturer will choose to outsource this business to the retailer who will also benefit.