Research On Coordination Mechanism For E-waste Recycling System With Risk-Averse Collectors

In recent years, all kinds of electronic products have quickly swept theworld, which makes the revolutionary changes in areas such as communication,entertainment, transportation, education and health care, there is no doubt thattechnologies have given consumers excellent products and service experiences.However, the problem of electronic waste will be a great threat to our life if theyare not well disposed. Therefore, we should consider how to find a balanceamong the environment, the economic growth and the social benefits.The rapid development of supply chain has made the supply chainmanagement become a popular subject among academic study. One of theimportant parts of supply chain management is how to coordinate all thecomponents in the supply chain since it is entirely comprised of differentstakeholders. After reading great quantities of popular literatures, this paper findsthat now the research on the forward study of supply chain coordinationmechanism has been very mature. As the concept of sustainable developmentbeing proposed, the research on recycling of wastes become popular, but theresearch on the coordination mechanism of reverse supply chain is still in itsinfancy stage. Besides, the decisions of traditional recycling on reverse supplychain network research mostly assumes that the decision makers are risk neutral,which ignore considering the decision maker’s risk attitude that may affect therecycling decisions. Therefore, the combination of coordination on reverse supply chain management and the decision maker’s risk attitude is of great theoreticaland practical significance.According to the background above, after reviewing related literatures,modeling, simulation methods, the main research and findings of this thesis are asbelow:1) Reviews are made on present situation of reverse logistics, electronicwastes, as well as revenue cost sharing contract and option contract.2) Based on the research on revenue-cost sharing contract, option contract,combination contract, and the characteristics of reverse logistics, this article usesStackelberg method to build the recycling model of supply chain to analysisrisk-neutral recycler and risk-averse recycler’s decision. Then through thenumerical simulation and analysis, the article would respectively compare thebenefits under the situations of no coordination contract and with coordinationcontract. It finally concluded that use of revenue-cost sharing contract, optioncontract and joint contract would increase the benefits of supply chain, andachieve the goal of coordination of supply chain.3) Considering decision-maker’s attitude to risk, this article uses the utilityfunctional model to build the recycling model based on revenue-cost sharingcontract, option contract and joint contract, which aims to find out the optimalvalue of decision variable. Through the simulation by Mathematica software, thearticle would analysis the impacts of degree of risk aversion to the supply chainunder the situations where recycler is risk-neutral decision-maker and risk-averse decision-maker. The results show that the coefficient of risk aversionis closely related to the revenue and expense sharing proportion, the strike price,recycling price and the benefits of supply chain.This paper builds the recycling model based on revenue-cost sharingcontract, option contract and the joint contract in the case of consideringdecision-maker’s attitude to risk, which would be closer to the actualdecision-making behavior, and can provide reverse logistics network of recyclingwith decision basis.