Decision Making Model Based On Game Theory For Product Recycling

Reverse logistics could result in the improvement of resource utilization and the reduction of growing number of solid pollutants, and its role in improving the situation of the ecological environment is widely recognized. In practice, there are a variety of businesses forms, market conditions and supply chain structures, which have their own characteristics. It is of practical significance for the selection of recovery mode and the concrete operation of supply chain members to study the market adaptability of recovery mode and the optimal decision of supply chain member. Therefore, above issues are studied in this thesis.A game theory model is built to develop the study perspectives of combining four market forms of supply chain which are represented by Nash game, Stackelberg-manufacturer game, Stackelberg-retailer game and cooperation game with three kinds of recycling modes including manufacturer recycling mode, retailer recycling mode and the third party recycling. Manufacturer may choose different price and uniform price among retailers in a supply chain consisting of a single manufacturer and multiple retailers where the manufacturer is the leader. Based on the forms of supply chain, a comparative study is investigated in reverse logistics domain and the advantages of retailers as recovery collector could be fully recognized. Meanwhile, the discriminative pricing strategy and the uniform pricing strategy are also analyzed.In case of retailer being the leader, the equilibrium of game model is conducted and the experimental results is thereby analyzed, the maximized profit of supply chain is achieved through comparing optimal decision-making and profit results of different market conditions at a given recycling mode. Supply chain members could achieve more profit share when they have more decision power. By comparing optimal decision and profit of recycling modes in a given market condition, a conclusion is drawn that retailers prefer the recycling mode that they act as collectors, while the manufacturer’s preference is influenced by the quantity of the recycled products and the recycling costs. It could gain more profit for supply chain where new product market demand is stable and recyclable products are easy to obtain.