Analysis of Closed-Loop Supply Chain Model Considering Government Subsidy Changes
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Yunfu Huo and Xinxin Chen
This paper adopts the method of game theory to construct the closed-loop supply chain which is made up by government, a single manufacturer and a single retailer. The government takes a proportional approach to distribute the subsidies to both the manufacturer and the retailer. Thus we establish a decision model of the closed-loop supply chain, find the optimal decisions under different circumstances, analyze the results, and use analysis of examples to verify the results. The analyses show that when the unit subsidy of remanufactured products is fixed, we will find the optimal ratio of subsidies to improve the recycling of waste products. When the ratio of government subsidies is fixed, we will find the optimal amount of subsidies. At this time, if the retailer raises the quality coefficient of waste products, the recovery prices and profits of the manufacturer will both increase, the retailer's recovery price, recovery volume and profits from consumers will also increase, and the government's profits will also increase. Finally, we will verify the model by analysis of examples.and marine environment in the region.
Game; Closed-loop supply chain; Government subsidies; Decision making