Optimal decision problem in a three-level closed-loop supply chain with risk-averse players under demand uncertainty

In this paper, a stochastic model of a closed-loop supply chain (CLSC) with one risk-averse manufacturer, one risk-averse retailer and one risk-averse third party is developed.
Nội dung trích xuất từ tài liệu:
Optimal decision problem in a three-level closed-loop supply chain with risk-averse players under demand uncertainty Uncertain Supply Chain Management 7 (2019) 351–368 Contents lists available at GrowingScience Uncertain Supply Chain Management homepage: www.GrowingScience.com/uscmOptimal decision problem in a three-level closed-loop supply chain with risk-averse players underdemand uncertaintySafoura Famil Alamdara, Masoud Rabbania* and Jafar Heydariaa School of Industrial Engineering, College of Engineering, University of Tehran, Tehran, IranCHRONICLE ABSTRACT Article history: In this paper, a stochastic model of a closed-loop supply chain (CLSC) with one risk-averse Received May 16, 2018 manufacturer, one risk-averse retailer and one risk-averse third party is developed. To analyze Accepted July 16 2018 how the members make decisions about wholesale price, collection rate, retail price and sales Available online effort under different decision-making structures, the optimal decision problem under July 17 2018 Keywords: uncertain price and sales effort-dependent demand is studied through development of four Closed-loop supply chains game theoretical models. The equilibrium results between various models are compared and Risk-averse the optimal decisions from each member’s perspective are investigated. According to the Collection effort results, the third party-led model has better performance than manufacturer-led model. The Sales effort cooperation mode of manufacturer and retailer is beneficial for the whole chain and customers Game theory and the cooperation mode of manufacturer and third party is the most effective model to collect Coordination contract the used-product. Finally, to increase the performance of decentralized CLSC compared with the centralized CLSC, a coordination contract is developed. The results indicate that this contract is advantageous for the members of CLSC, the customers, and the environmental issues. © 2018 by the authors; licensee Growing Science, Canada1. IntroductionClosed loop supply chain (CLSC) is defined as “from the perspective of the product total life cycle,integrating the traditional forward supply chain activities and a set of additional activities of reversesupply chain, i.e., designing, planning and controlling in the whole process from the acquisition andproduction to redistribution, in order to recapture additional values” (Fleischmann et al., 1997; Guide& Wassenhove, 2006). Due to increased environmental consciousness, environmental concerns andstrict environmental laws, CLSC management has become attractive for both business and academicresearch throughout this decade (Prahinski & Kocabasoglu, 2006). CLSC has become an element thatcompanies must consider in decision-making processes concerning the design and development of theirsupply chains (Rubio & Corominas, 2008). For instance, Xerox is a leader in remanufacturing the high-value, end-of-lease copiers for producing the new copiers. Also, Hewlett Packard reuses the usedperipherals and computers. Similar activities are undertaken by Canon for print and copy cartridges(Savaskan & Van Wassenhove, 2006). A simple CLSC consists of three types of members: themanufacturer/remanufacturer, the retailer, and the third-party (collector) (Savaskan et al., 2004).* Corresponding author Tel.: +98 218 8021067; fax: +98 218 8013102 E-mail address: mrabani@ut.ac.ir (M. Rabbani)© 2019 by the authors; licensee Growing Science, Canadadoi: 10.5267/j.uscm.2018.7.002352Usually, manufacturers such as Toyota and GM have a leadership role and the retailers are the followers(Cachon, 2003). In recent years, giant collectors such as SIMS Metal Management, AER Worldwideand IBM’s Global Asset Recovery Services take the market power and act as the channel leader in theCLSC (Karakayali et al., 2007).Also, there are different coalition structures in CLSCs in real life. For instance, the “big three” automanufacturers in the United States (i.e., GM, Chrysler, Ford) have established a long-term cooperativepartnership with recyclers. Moreover, in some situations, the manufacturer and the retailer such as P&Gand Wal-Mart can establish a good cooperative relationship (Zu-Jun et al., 2016). So, analyzing thedecisions of participants under various power structures and different cooperative behaviors has beenincreasingly noticed in CLSC management. However, in many cases, the supply chain members, inaddition to increasing their profits, seek to reduce their risk. There have been several studies carriedout on forward supply chain management with risk-averse players (Xiao & Yang, 2008; Hafezalkotobet al., 2011; Xie et al., 2011; Whalley, 2011; Xiao et al., 2012; Xiao & Xu, 2014; Shang & Yang, 2015;Zhou et al., 2018; Yan et al., 2018). To the best of our knowledge, there is no research on CLSCmanagement with risk-averse players’ structu ...