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Managing Supplier-Manufacturer Closed-Loop Supply Chain Considering Product Design and Take-Back Legislation

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  • Yue Wang

    (College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing 210016, China)

  • Baoying Xin

    (Shandong Institute of New Urbanization, Shandong Management University, Jinan 250357, China)

  • Zhe Wang

    (College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing 210016, China)

  • Bangyi Li

    (College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing 210016, China)

Abstract

Facing a growing amount of waste electrical and electronic equipment (WEEE), a recent recast of the WEEE directive has put a specific reuse target for manufacturers, aiming to reduce environmental pollution and incentivize a green product design. In this paper, in order to examine whether the above two goals can be achieved by setting a specific reuse target, we have modelled a closed-loop supply chain consisting of a supplier (the leader) and a manufacturer (the follower) with the constraint of a mandated remanufacturing target. In this model, the supplier determines the level of interchangeability in product design and the wholesale price of the key component. The manufacturer buys the key components from the supplier and makes production and remanufacturing decisions under the requirement of a mandated remanufacturing target. We have investigated the supply chain’s members’ optimal decisions and analyzed the impact of the mandated remanufacturing target on the optimal profits of the supply chain’s members and consumer surplus, and finally, we have explored the environmental implications of the mandated remanufacturing target. We found that the supply chain’s members’ optimal decisions are affected by the mandated remanufacturing target and the cost of the new component. In terms of the economic implications of the mandated remanufacturing target, we have demonstrated that the increase in the mandated remanufacturing target has negative effects on the profits of the supply chain’s members and consumer surplus. Regarding the goal of incentivizing green product design, we found that the mandated remanufacturing target cannot always incentivize the supplier to implement product design that is beneficial to remanufacturing. From the perspective of the environment, we further indicate that more stringent mandated remanufacturing targets may bring an undesirable environmental outcome.

Suggested Citation

  • Yue Wang & Baoying Xin & Zhe Wang & Bangyi Li, 2019. "Managing Supplier-Manufacturer Closed-Loop Supply Chain Considering Product Design and Take-Back Legislation," IJERPH, MDPI, vol. 16(4), pages 1-26, February.
  • Handle: RePEc:gam:jijerp:v:16:y:2019:i:4:p:623-:d:207705
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    References listed on IDEAS

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    Cited by:

    1. Yufei Hu & Lianghua Chen & Yingying Chi & Bowen Song, 2022. "Manufacturer encroachment on a closed‐loop supply chain with design for remanufacturing," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 1941-1959, September.
    2. Qixiang Wang & Linghui Kong & Jin Li & Bangyi Li & Fan Wang, 2020. "Behavioral Evolutionary Analysis between the Government and Uncertified Recycler in China’s E-Waste Recycling Management," IJERPH, MDPI, vol. 17(19), pages 1-15, October.
    3. Yuyan Wang & Tingting Yu & Rui Zhou, 2022. "The Impact of Legal Recycling Constraints and Carbon Trading Mechanisms on Decision Making in Closed-Loop Supply Chain," IJERPH, MDPI, vol. 19(12), pages 1-26, June.
    4. Manyi Tan & Fei Pei & Li He & Hong Cheng & Shupeng Huang, 2023. "Optimal Decision-Making of Closed-Loop Supply Chains in E-Commerce Platform Considering Sales Cooperations under Environmental Effects and WEEE Regulations," IJERPH, MDPI, vol. 20(9), pages 1-28, May.
    5. Yujing Si & Yi Yang & Ze Shao, 2024. "Research on Green Design Strategy of Electrical and Electronic Manufacturing Enterprises Based on the Perspective of Tripartite Evolutionary Game," Sustainability, MDPI, vol. 16(7), pages 1-21, March.
    6. Jun Yao & Dongyan Chen & Hui Yu, 2022. "Decision-Making and Coordination of Remanufacturing Closed-Loop Supply Chain with PIR under the Different Government Subsidy Strategies," Sustainability, MDPI, vol. 14(23), pages 1-21, December.
    7. Meng, Lin & Lv, Wangyong & Yuan, George Xianzhi & Wang, Huiqi, 2023. "The dynamic risk profiles and management strategies in supply chain coopetition under altruistic preference," International Review of Financial Analysis, Elsevier, vol. 90(C).

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