A Closed-Loop Supply Chain Operation Problem under Different Recycling Modes and Patent Licensing Strategies

Abstract

A closed-loop supply chain operation is an effective way to improve the dual benefits of economy and environment. Inspired by the practice of closed-loop supply chain coordination, this paper attempts to investigate the supply chain operation strategies of different recycling modes and patent licensing strategies and consider the impact of government subsidies. We construct a multi-player game model of an original manufacturer, a remanufacturer, and a retailer under a waste product recycling mode, patent licensing strategy, and government subsidy system. We provide the operation strategies under different strategy combinations in the closed-loop supply chain, and then analyze their differences and the interests of various subjects. We further analyze the impact of government subsidies on the operation strategies of the supply chain. The results illustrate that when the original manufacturer adopts the fixed fee patent licensing strategy, the recycling price of waste products is higher. When the original manufacturer adopts the unit fee patent licensing strategy and the retailer and the remanufacturer participate in the recycling of waste products simultaneously, the original manufacturer will increase the unit patent licensing fee. When the remanufacturer recycles waste products alone, consumers can obtain greater unit income in the waste product recycling market. Different government subsidies have different effects on the wholesale price and the retail price of new products and remanufactured products.