A Dual-Channel Cooperative Strategy between Recyclers and E-Tailers for the Offline and Online Recycling of Waste Electronics

Abstract

A Stackelberg game model was formulated for dual recycling channels for a supply chain with a recycler and an e-tailer, who recycle and resell waste electronics. A reverse solution was adopted to find the optimal recycling prices, the optimal selling prices, and the supply chain’s overall profits for cooperative and non-cooperative models. The profits gained in the cooperative model were greater. We proposed a revenue-sharing contract to investigate the profit distribution. Finally, we validated the effectiveness of the cooperative recycling model through numerical simulations, calculated the revenue-sharing factors, and analyzed the effects of these factors on the decisions of the recycler and the e-tailer. By comparing the dual-channel non-cooperative recycling model based on online and offline recycling by the recycler to the dual-channel cooperative recycling model based on offline recycling by the recycler and online recycling by the e-tailer, as well as examining the results in relation to the contracts, we found that the recycler and the e-tailer should cooperate in recycling electronics to maximize the supply chain’s overall profits. However, the e-tailer will see reduced profits and may be less willing to cooperate, so it is necessary to formulate a revenue-sharing contract. The revenue-sharing factors in the contract must be set within a reasonable range; otherwise, either party could see reduced profits and renounce cooperation, even if the supply chain’s overall profit is maximized. The recycler is the more critical party for achieving cooperation. In this paper, we research the cooperative strategy between recyclers and e-tailers that is conducive for expanding the market scale of waste electronics recycling and improving the profits of both parties, while promoting the sustainable development of the supply chain.