The Coordination and Optimization of Closed-Loop Supply Chain with Lots of Factors

Chengdong SHI, Guanglu ZHOU, Dunxin BIAN, Meixiang WU

Journal of Systems Science and Information ›› 2016, Vol. 4 ›› Issue (4) : 307-320.

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Journal of Systems Science and Information ›› 2016, Vol. 4 ›› Issue (4) : 307-320. DOI: 10.21078/JSSI-2016-307-14
Article

The Coordination and Optimization of Closed-Loop Supply Chain with Lots of Factors

  • Chengdong SHI1, Guanglu ZHOU2, Dunxin BIAN3, Meixiang WU1
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Abstract

Consider a closed-loop supply chain including a manufacturer, a retailer and two third party recyclers as the background. A coordination and optimization model is built by using the downside-risk function, Cournot model and government subsidy excitation function. The effect of risk characteristics, government subsidy and Cournot competition on supply chain is analyzed, and the impact of revenueand-expense sharing contract is studied in the channel, which shows that the contract cannot coordinate and optimize the closed-loop supply chain. Also, risk sharing contract and expense sharing contract are designed, which can offer the desired downside protection to the retailer, provide more profits to the agents, and accomplish channel coordination and optimization. Moreover, an application example is given for testing the effectiveness and feasibility of the contract, and the bound and rule of the contract parameters are given. Finally, by the analysis of numerical simulation and sensitivity of the model based on the contract, the validity and practicability of the model are verified, and the relationship between government subsidy, risk characteristics, competitive characteristics with the supply chain is obtained. This study provides decision support and decision-making reference for the development of remanufacturing industry.

Key words

downside-risk / government subsidy / Cournot competition / coordination and optimization

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Chengdong SHI, Guanglu ZHOU, Dunxin BIAN, Meixiang WU. The Coordination and Optimization of Closed-Loop Supply Chain with Lots of Factors. Journal of Systems Science and Information, 2016, 4(4): 307-320 https://doi.org/10.21078/JSSI-2016-307-14

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Funding

Supported by the National Natural Science Foundation Program of Shandong Province (ZR2013GM001), Humanities and Social Sciences Project of Chinese Ministry of Education (16YJAZH053, 13YJAZH12), the Social Science Research Project of Shandong Province (11CGLZ07, 12CGLZ10), the Humanities and Social Sciences Development Foundation of Shandong University of Technology (2010ZDXM07), the Doctoral Scientific Research Program of Shandong University of Technology (2011KQ08)

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