165 / 330
臺大管理論叢
第
27
卷第
2
期
165
its usage by an ordinary manufacturer, e.g., most composite material products and
construction wastes (The Economist, 2002). For example, cost savings from procuring
EDRMs may not be proportionate to quality loss or degeneration in the final product. While
supply source is constantly unsteady and unsecure, EDRMs also suffer from indefinite
delivered quantity and possibly high acquisition costs. Furthermore, unlike virgin materials,
EDRMs usually have limited applications, are consumed in small amounts, and account for
only a fraction of the entire bill of materials; hence they are often not prioritized in material
usage. Owing to the challenges, previous literature leaves space for our improvement in
addressing the issues of a closed-loop supply chain for EDRMs. The following research
questions are addressed: How can a EDRM supply chain be sustainable without artificially
enforcing the minimum content of EDRM in the final products? When will a EDRM closed-
loop supply chain sustain without government intervention?
Our outcomes suggest that a simple subsidy mechanism in cost-based taxing (Dobbs,
1991) can encourage a manufacture to employ more EDRMs. We suggest that governments
should get involved in recycling such profitless materials. The manufacturers can therefore
rely on the decisions of both governments and EDRM suppliers in determining the
production amount of green products.
2. Related Literature
Although managerial topics in material recovery have been studied extensively, most
studies ignore the heterogeneity in material characteristics and underestimate the difficulty in
recycling certain kinds of materials. For instance, closed-loop systems are limited to
investigating the interaction between members such as manufacturers and retailers, in
dealing with end-of-life product collection, but supply chain behavior caused by material
heterogeneity and economic market viability is disregarded (The Economist, 2002).
Because of the low economic value and inferior channel power, EDRMs behave
differently in conventional economic instruments. Poor handling of EDRMs discourages the
industry from collecting these materials. Consequently, based on the GSCM concepts
proposed by Majumder and Groenevelt (2001), Ferrer and Swaminathan (2006), and Sheu
and Talley (2011), this paper investigates how economic instruments and product quality loss
dictate the aggregate decisions of key members in a green supply chain in the strategic
planning domain.
The gaps in existing research present a research opportunity for the current study, which
concerns the use of recycled materials in the industrial market rather than in the consumer