Coordinating a closed-loop supply chain with fairness concerns through variable-weighted Shapley values

This paper considers a closed-loop supply chain (CLSC) structure in which a manufacturer allows a retailer and a third-party remanufacturer to sell and remanufacture his products, respectively. Given the retailer’s distributional fairness concerns, we investigate the optimal/equilibrium decisions and profits under five non-cooperative and cooperative game models, and focus on how to allocate maximum profit in a centralized setting. Based on the classic Shapley value, we propose an innovative weighted allocation approach-namely, the variable-weighted Shapley value-to coordinate this CLSC. Numerical studies demonstrate that when remanufactured products are lowly accepted by consumers, our model outperforms the classic Shapley value.