Abstract
Considering the case of recycling competition between a manufacturer and a retailer, we construct game models under centralised and decentralised decision-making with or without fairness concern, respectively. By comparatively analysing the optimal decisions and profits under the three models, we design an improved two-part tariff contract to realise supply chain coordination. We have the following findings: First, in the supply chain with traceability, consumers’ preference for traceability and the impact of traceability on recycling are not only beneficial to the environment but also to each enterprise. Second, the retailer’s concern for fairness can harm the profits of the manufacturer and system. Moreover, the retailer’s disproportionate focus on fairness of the distribution of revenues hinders the introduction and development of the traceability system, leading to lower recycling volume and demand. Third, the traceability system is most efficient under centralised decision-making, attaining the highest traceability level, recycling volume, and system profit. The retail price and manufacturer’s recycling price are lower than those under decentralised decision-making. Our findings also suggest that improved two-part tariff contract can enhance the chain members’ performance. While fairness concern and fierce recycling competition hinder implementation of the coordination mechanism, and improved traceability facilitates the attainment of coordination.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Data availability statement
The authors confirm that the data supporting the findings of this study are available within the article.
Authorship contribution statement
Qiuchen Wu: Software, Formal analysis, Writing – original draft. Yuyan Wang: Conceptualisation, Methodology, Funding acquisition. T.C.E. Cheng: Writing – review & editing. Yulin Sun: Writing-review & editing.
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Additional information
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Qiuchen Wu
Qiuchen Wu is a PhD candidate in the Management Science and Engineering, School of Business, Shandong Normal University. She received her M.S. degree in Logistics Engineering from Xidian University in 2022. Her current research interests include supply chain management, blockchain operations, and game theory. She has published article in Journal of Intelligent Manufacturing.
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Yuyan Wang
Yuyan Wang is a professor at Shandong University of Finance and Economics and Shandong Normal University. She received her PhD in management from Nanjing University of Aeronautics and Astronautics. Her research interests include e-commerce, supply chain management, closed-loop supply chain, environmental regulation, game theory applications. Her research results have been published in European Journal of Operational Research, International Journal of Production Economics, International Journal of Production Research, et al. Her published papers have been cited 283 times in a single article and more than 3,000 times cumulatively.
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T.C.E. Cheng
T.C. Edwin Cheng is Dean of PolyU Business School, Fung Yiu King – Wing Hang Bank Professor in Business Administration and Chair Professor of Management at The Hong Kong Polytechnic University. He obtained a B.Sc. [Eng] (first class honours) from the University of Hong Kong; an M.Sc. from the University of Birmingham, U.K.; and a Ph.D. and an Sc.D. from the University of Cambridge, U.K. Prof. Cheng’s research interests are in operations management and operations research. He has published over 900 SCI/SSCI papers and co-authored 15 books. According to Google Scholar, he has received over 50,000 citations and his h-index is 105.
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Yulin Sun
Yulin Sun is a master’s degree student in the School of Engineering at the University of Sydney. He received his bachelor's degree from Shandong Jianzhu University, China, in 2022. His research interests include game theory and supply chain management.