Investigating strategies of a green closed-loop supply chain for substitutable products under government subsidy

ABSTRACT

This article describes a two-level green closed-loop supply chain including two competing manufacturers and a common retailer for marketing substitutable products under government sponsorship. The primary aim is to explore how the manufacturers set strategies for better outcomes, how the government intervention affects the optimal results and how to enhance supply chain efficiency. It considers various problem scenarios, namely, centralized, Nash game, and manufacturer-led Stackelberg game. Cost sharing (CS) and revenue sharing under cost sharing (RCS) contracts are executed to expand the greening level and execution of the supply chain. Numerical analyses show that (i) Stackelberg game is profitable for the manufacturers while Nash game is favorable for the retailer and the entire supply chain; (ii) CS contract cannot give a win-win outcome but RCS contract assists with accomplishing it; and (iii) the government subsidy can effectively expand the sales volume by enhancing product’s greening level.

Graphical abstract

KEYWORDS:

• Closed-loop supply chain
• substitutable product
• greening level
• pricing policy
• government subsidy
• cost sharing contract
• revenue sharing contract

Acknowledgments

The authors are sincerely thankful to the anonymous reviewers for their helpful comments and suggestions on the earlier version of the manuscript.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Government-subsidy-for-small-business-in-India.

Additional information

Funding

This work was supported by the University Grants Commission [16-9(June 2017)/2018(NET/CSIR)].

Notes on contributors

Chirantan Mondal

Chirantan Mondal is a Research Scholar in the Department of Mathematics, Jadavpur University, Kolkata, India. He did his B.S. and M.S. in Mathematics both from University of Calcutta. His area of interest is green supply chain management. He has published papers in Journal of Cleaner Production, Operational Research, Flexible Services and Manufacturing Journal, CIRP Journal of Manufacturing Science and Technology, Journal of Industrial & Management Optimization, and RAIRO Operations Research.

Bibhas C. Giri is a Professor in the Department of Mathematics, Jadavpur University, Kolkata, India. He did his M.S. in Mathematics and Ph. D. in Operations Research both from Jadavpur University, Kolkata, India. His research interests include inventory/supply chain management, production planning and scheduling, reliability and maintenance. Professor Giri has published more than 100 research papers in the journal of international repute. His papers have appeared in journals such as Naval Research Logistics, Journal of Cleaner Production, International Journal of Production Research, OMEGA, Journal of the Operational Research Society, European Journal of Operational Research, International Journal of Production Economics and so on. He was a JSPS Research Fellow at Hiroshima University, Japan during the period 2002-2004 and Humboldt Research Fellow at Mannheim University, Germany during the period 2007-2008.