Closed-loop supply chain decision considering information reliability and security: should the supply chain adopt federated learning decision support systems?

The study considers the closed-loop supply chain (CLSC) decision using federated learning platform (FL platform), establishes a CLSC game model including one manufacturer, one retailer and one third party, analyzes the influence of FL platform on optimal decisions and revenues of CLSC system from the perspectives of information reliability, information security and investment cost, and establishes a cost-sharing and revenue-sharing contract (CSRS contract) to coordinate CLSC system. Results show that, the greater consumers' recognition of the remanufactured product, the higher its price and revenue; using FL platform can guarantee the degree of consumer information security, which in turn has a constructive effect on the CLSC; when the FL platform is not adopted, the manufacturer will raise more revenue by misrepresenting the manufacturing and remanufacturing costs; the FL platform would provide some incentive for manufacturers to disclose true cost information and improve the CLSC revenue; an increase in investment costs would lead to a reduction in revenue, so CLSC members would need to make investment decisions based on revenue comparisons before and after using the platform; finally, within the feasibility of the contract parameters, the CSRS contract both maximizes optimal revenue of CLSC system and improves revenue per member.

Automated summary

This study examines the decision-making process of the closed-loop supply chain (CLSC) using a federated learning platform (FL platform). A game model is established, involving a manufacturer, a retailer, and a third party, to analyze how the FL platform influences the optimal decisions and revenues of the CLSC system in terms of information reliability, information security, and investment cost. Furthermore, a cost-sharing and revenue-sharing contract (CSRS contract) is proposed to coordinate the CLSC system. The findings suggest that the recognition of remanufactured products by consumers positively affects their price and revenue, while the use of FL platform ensures consumer information security and improves the CLSC.