Research On Incentive Contracts For E-waste Recycling System

With the continuous progress of science and technology, and the rapid development of global productivity, as well as the customers’ individual consumption and the product shorten life cycle, then a large number of electronic wastes generates. If these e-wastes are not effective treatment, a lot of resources will be wasted and the pollution to environment will be much serious.However, the recycling of the e-wastes is mostly in the hands of small traders and small workshops, which make high environment pollution and low resource utilization. Meanwhile, the regular enterprises are in short of resources. The policy of replacement had taken a large part of electronic waste into regular channels, but after the recycle policy age how to promote the amount of regular channel and regulating the recycling of informal channels at the same time, become a hot topic to many scholars.Based on this background, First of all, this paper studied the relevant literature review about domestic and foreign e-waste recycling processing and the theoretical foundation of the E-waste recycling mode such as reverse supply chain theory, game theory and the theory of supply chain coordination. Secondly, this paper analyzed the current situation of e-waste recycling in China and found out the problems. Then, The paper investigated a two-echelon e-waste reverse supply chain system which consists of a third-party e-waste collector, individual traders and a processor, discussed the several decisions with/without government subsidies case. In order to find the best option:subsidies on the third-party collector. At last, two-part tariff contract and rewards and punishments contract are applied to coordinate the reverse supply chain. Based on the theoretical analysis and modeling, numerical example is used to illustrate the effectiveness of the model. The conclusion shows that the problem of double marginalization exists in the structure of decentralized decision; government subsidies policy can increase the amount of recycled reverse supply chain, and under the same subsidies level, the policy of giving the subsidies to the third-party collectors is more significant effect than the policy of the processors; the two-part tariff contract signed between collectors and processors can eliminate marginal effect, which can achieve overall efficiency of the centralized decision-making; the threshold amount of collection rewards and punishments contract cannot coordinate the entire supply chain, and the total system recovery and profits cannot increase, but it can coordinate the relationship in the recycling competition between the formal and informal collectors, which optimizes e-waste reverse supply chain purposes.The purpose of this paper is to find out the reasonable subsidies decision, and guide and supervise the individual traders, as well as give the regular recycling enterprises some incentives and supports, then realize the positive development. The results can provide the government restrictions on e-waste recycling and the proposed methods provide decision support.