Study On Contract Coordination Of Closed-loop Supply Chain Based On Recyclers Competition

Including the forward supply chain and reverse supply chain two components ofclosed-loop supply chain is an important operation and management mode of thefuture economic development and has an important significance to solve the currentincreasingly serious contradictions between economic development and the society,environment. Closed-loop supply chain affected by many factors has more systemuncertainty than forward supply chain that brought difficulties to closed-loop supplychain management practice. In the current theoretical research literature, researcherstend to assumes a simple model with a single closed loop supply chain structure thathave larger gap with the realistic economy comprised multiple participants ofcompetition and influence each other each other in each link. This shortcoming limitsthe application of the theory research.From the core remanufacturing enterprise perspective of closed-loop supplychain core remanufacturing, this paper discusses two kinds of closed-loop supplychain contract coordination model based on competing recycler assume: the twocompeting recycler with a manufacturer and multiple competing recycler with amanufacturer. Because of recyclers’ competition each other, recycling price (set as pr1,pr2) of recycling businesses purchase consumer’s EOL product influence each other,and recycling prices of the two recyclers and purchase price of remanufacturer (as theprm) also influence each other. Thus, there is a complex interactive relationshipbetween pr1, pr2and prmas the most common coordination variables of closed-loopsupply chain including competitive recyclers and remanufacturers. Any one party’sdecision will affect the other two parties; any one party’s decision will be affected bythe other two parties.In order to solve the above problem, this paper studies the rules of closed-loopsupply chain with competitive recyclers by price contract and the recovery quantitycontract of symmetric and asymmetric information situation and puts forward theoptimal recovery price relationship between two recyclers under different contract andinformation. On the basis of above study, this paper studies two kinds ofremanufacturing market environment model respectively and obtain differentclosed-loop supply chain coordination schemes in different market environment of theclosed-loop supply chain composed by two competing recyclers and a manufacturer.Except the two oligarchs recyclers competition, more competitive recycler and a manufacturer of closed-loop supply chain is the very typical closed-loop supply chainstructure. This paper studies the closed-loop supply chain operation mode composedby multi-competitive recycler and a manufacturer by multi-Agent model theory anddraw a conclusion that contract design of competitive recyclers cost improvementactivities subsidy is the most obvious, is also the most effective on the closed-loopsupply chain coordination.In order to reduce the high cost of closed-loop supply chain with asymmetricinformation and process uncertainty, this paper also discusses the constructionproblem of closed-loop supply chain information sharing and coordination system anddesigns a closed-loop supply chain management system for construction machineryindustry.The main conclusions of this paper can be summarized as follows:(1) Information asymmetry is advantage to recycling business and more obviousto the disadvantages recycling business in the closed-loop supply chain composed bytwo competitive recyclers and a remanufacturing. Therefore, to promote informationsharing is advantage recyclers in the recycling market. The game of the two recyclersshare information is a “Boxed Pigs Game” which equilibrium condition is: theadvantage recycler shares recovery information and disadvantage recycler don’t shareitself information.(2) When the markets of remanufacture and new product are independent ormarket can accommodate all of remanufacturing products, remanufacturing enterpriseprovides balanced recovery contract value is:(disadvantage recyclers, advantagerecycler)=(the contract price, contract number) whether information symmetry or not.And when the markets of remanufacture and new product influence each other andremanufacturing product market capacity is large enough, the contract combinationcan not only realize the closed loop supply chain contract coordination, but also togive the remanufacturing largest market power.(3) When the markets of remanufacture and new product influence each otherand remanufacturing product market capacity is not able to accommodate all ofremanufacturing products, to provide centralized price contract is the optimal choicewhich provided by manufacturing enterprises to two recyclers. Remanufacturingproduct in closed-loop supply chain slightly surplus and the closed-loop supply chainachieves coordination.(4) In the closed-loop supply chain of multiple competitive recyclers and a manufacturer, the behavior of the manufacturer or the government improve a recyclerprice to increase the recovery rate doesn’t affects other recyclers price in theclosed-loop supply chain. The optimal closed-loop supply chain equilibrium contractis manufacturers or the government provides some subsidies to improvementmeasures of recycling business and recyclers take the pricing strategy of maximizetheir own interests and competition with the partial competitors.(5) The cost of closed-loop supply chain participants has great significance toclosed-loop supply chain coordination. Except manufacturers and governmentsubsidies for participants to reduce cost measures, to build a closed-loop supply chainmanagement information system can effectively reduce a lot of cost because ofclosed-loop supply chain uncertainty, so as to realize the equilibrium of closed-loopsupply chain.The combination of information coordination and contract coordination will bethe most effective means of closed-loop supply chain coordination. The results of thispaper have important theoretical significance to manufacturing enterprise closed-loopsupply chain management and to the governments take industrial policy to promotethe development of closed-loop supply chain practice.