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On the cooperation of recycling operations

Author

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  • Lu, Liang
  • Qi, Xiangtong
  • Liu, Zhixin

Abstract

This paper addresses two important issues that may affect the operations efficiency in the recycling industry. First, the industry contains many small-scale and inefficient recycling firms, especially in developing countries. Second, the output from recycling a waste product often yields multiple recycled products that cannot all be sold efficiently by a single firm. To address these two issues, this paper examines how different firms can cooperate in their recycling and pricing decisions using cooperative game theory. Recycling operations under both joint and individual productions with different cost structures are considered. Decisions include the quantity of waste product to recycle and the price at which to sell each recycled product on each firm’s market. These decisions can be made jointly by multiple cooperating firms to maximize total profit. We design allocation schemes for maximized total profit to encourage cooperation among all firms. Managerial insights are provided from both environmental and economic perspectives.

Suggested Citation

  • Lu, Liang & Qi, Xiangtong & Liu, Zhixin, 2014. "On the cooperation of recycling operations," European Journal of Operational Research, Elsevier, vol. 233(2), pages 349-358.
    • Handle: RePEc:eee:ejores:v:233:y:2014:i:2:p:349-358
    DOI: 10.1016/j.ejor.2013.04.022
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    2. Susana G. Azevedo & Minelle E. Silva & João C. O. Matias & Gustavo P. Dias, 2018. "The Influence of Collaboration Initiatives on the Sustainability of the Cashew Supply Chain," Sustainability, MDPI, vol. 10(6), pages 1-29, June.
    3. Iyer, Ananth V. & Vedantam, Aditya & Lacourbe, Paul, 2023. "Recycled content claims under demand benefit and supply uncertainty: Multi-period model and application to glasswool insulation," European Journal of Operational Research, Elsevier, vol. 309(2), pages 745-761.
    4. Chen, Lujie & Zhao, Xiande & Tang, Ou & Price, Lydia & Zhang, Shanshan & Zhu, Wenwen, 2017. "Supply chain collaboration for sustainability: A literature review and future research agenda," International Journal of Production Economics, Elsevier, vol. 194(C), pages 73-87.
    5. Dou, Guowei & Choi, Tsan-Ming, 2024. "Compete or cooperate? Effects of channel relationships on government policies for sustainability," European Journal of Operational Research, Elsevier, vol. 313(2), pages 718-732.
    6. Sudusinghe, Jayani Ishara & Seuring, Stefan, 2022. "Supply chain collaboration and sustainability performance in circular economy: A systematic literature review," International Journal of Production Economics, Elsevier, vol. 245(C).
    7. Luo, Chunlin & Zhou, Xiaoyang & Lev, Benjamin, 2022. "Core, shapley value, nucleolus and nash bargaining solution: A Survey of recent developments and applications in operations management," Omega, Elsevier, vol. 110(C).
    8. De Giovanni, Pietro, 2018. "A joint maximization incentive in closed-loop supply chains with competing retailers: The case of spent-battery recycling," European Journal of Operational Research, Elsevier, vol. 268(1), pages 128-147.

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