A hierarchical revenue-sharing contract in electronic waste closed-loop supply chain

Abstract

Due to the growing concerns about the increasing release of consumer products to the environment, especially for defective electronic products, the management of the closed-loop supply chain (CLSC) is emerging. To do this, a chain consisting of a manufacturer, a retailer, and a collector is offered in a manufacturer-led Stackelberg game. Due to the presenting of some concepts in the model, which are provided by considering two categories of customers for primary and secondary goods, it is suitable for electronics supply chains. In order to coordinate between the members of the chain, a hierarchical revenue sharing (HRS) contract is introduced, which is suitable for some members of the chain where operate as a holding company. In the following, some numerical examples are applied to examine the applicability of the proposed models. The results of the sensitivity analysis on the main parameters of the problem indicate an increase in the profitability of all members in the coordination contract compared to the decentralized mode. Furthermore, customer sensitivity to price and quality has also inverse and direct impact to members' profitability, respectively. Each of the analyzes provides some in-depth managerial implications that can be considered for future research. Finally, another research result will explain the increase in the amount of return defective goods by the customer in the contract mode.

Keywords: Closed-loop supply chain; Coordination mechanism; Defective electronic products; Electronic waste; Quality level; Revenue-sharing contract.