Coordination strategies and analysis of waste management supply chain

摘要

There has been an increased awareness among consumers regarding sustainability, especially in regards to recycling of used products. Firms are actively incorporating recycled/recyclable content in their product design to capture these "green" consumers in addition to the traditional consumers. Post-consumption, the waste management firms (WMF) are responsible for collecting, sorting and reselling the recyclable portion of the products and they face the threat of reduced revenues due to increased use of recycled content upstream by the original equipment manufacturers (OEM). This results in discrepancies in the optimal recycled content decision as far as the integrated waste management supply chain is concerned. We provide solutions to reconcile such discrepancy and suggest couple of approaches - (i)Nash bargaining assuming the OEM and the WMF both hold some relative bargaining power, (ii)Central Planners approach with tax and subsidy mechanism as a coordination strategy. We compare the optimal results under both these methods and further extend our analysis to consider investments by the OEM and WMF. We find that the taxes on the OEMs increase with their optimal investment behavior and subsidies might increase or decrease when waste management firms optimally invest in the recycling of the post-consumption products. (C) 2020 Elsevier Ltd. All rights reserved.