Coordination for a Closed-loop Supply Chain with Recycling Platform Considering Dynamic Setting

Abstract

This paper presents a dynamic closed-loop supply chain (CLSC) model, incorporating a manufacturer, a retailer, and an internet recycling platform (IRP), utilizing differential game theory while considering the forgetting effect of consumers. The model encompasses factors such as the quality level of used products and Big Data marketing (BDM), comparing optimal equilibriums under decentralized and cooperative decision scenarios. To effectively coordinate the dynamic CLSC at each time point, we propose a revenue-sharing and cost-sharing (RSCS) combined contract. In addition to ensuring reasonable sharing of revenues and costs, this contract allows the manufacturer to flexibly adjust wholesale prices for final products and transfer prices for used products in order to distribute profits appropriately and achieve Pareto optimality within the CLSC system. Furthermore, our results indicate that there exists a threshold for Big Data marketing efficiency; high-efficiency BDM not only facilitates increased recycling on Internet platforms but also reduces unit recycling costs for enterprises. Interestingly, when implementing the combined contract, Big Data marketing efficiency does not impact the transfer price paid by manufacturers to Internet recycling platforms.

Keywords

Big Data marketing / differential game / closed-loop supply chain / coordination / internet recycling platform

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