With or without deposit-refund system for a network platform-led electronic closed-loop supply chain

The aim of this study is to explore the influence of the deposit-refund system (DRS) on the optimal decisions and performance of an electronic closed-loop supply chain (e-CLSC) with one network platform and one manufacturer. The e-CLSCs with the DRS and without the DRS are developed and compared in centralized and decentralized models under the network platform-led. We find that the DRS always benefits the network platform. In the decentralized scenario, the actual costs of consumer payment and manufacturer collection with the DRS exceed those of the model without the DRS, even though the market selling and recycling prices are lower in the model with the DRS, which can result in a higher recovery rate and a lower market demand. The cost saving from remanufacturing is crucial to whether the stability of the e-CLSC can be maintained. To maintain the long-term stability of the supply chain, we posit that the government should offer a remanufacturing subsidy when the cost saving is relatively low. No matter whether the DRS is implemented or not, the centralized systems outperform the other two in terms of overall profits. We also justify the proposed models through numerical examples. (C) 2020 Elsevier Ltd. All rights reserved.

Automated summary

The study reveals that the deposit-refund system has a positive impact on the network platform in an electronic closed-loop supply chain. Cost savings from remanufacturing are crucial for maintaining supply chain stability. Centralized systems outperform others in terms of overall profits.