Optimal Decisions in Green, Low-Carbon Supply Chain Considering the Competition and Cooperation Relationships between Different Types of Manufacturers

Abstract

In this study, we built a green, low-carbon supply chain including one green manufacturer, one green remanufacturer and one retailer in which the manufacturer produces new, green, low-carbon products and the remanufacturer recycles and remanufactures the green, low-carbon products. We assumed the manufacturer to be the Stackelberg leader and the remanufacturer and the retailer to be Stackelberg followers. The game model was solved using backward induction. We discuss the optimal operation strategies for green, low-carbon supply-chain members in a centralized decision-making model, decentralized decision-making model, manufacturer–remanufacturer cooperative decision-making model and manufacturer–retailer cooperative decision-making model. Furthermore, we discuss the impacts of the unit cost savings for remanufacturing, the recovery cost coefficient and the green improvement cost coefficient on the green supply-chain members’ optimal decision and profits. The results show that increased unit cost savings from remanufacturing can increase the total profit of the supply chain and promote the recycling and remanufacturing of waste products. Moreover, the total profit of the green, low-carbon supply chain is the highest in the centralized decision-making model and lowest in the manufacturer cooperative decision-making model. When there is a cooperation relationship between the manufacturer and the retailer, the optimal recycling effort level and the optimal greenness level for the new product and the remanufactured product are the highest.