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6. Conclusions
This paper investigates the potential effects of governmental economic incentives and
policy frameworks on operational decisions and performance for the goal of promoting
GSCM. Our work contributes to the literature in several folds. The first is the involvement of
governments and their economic incentives into a closed-loop supply chain model for adding
insight into the effects of governmental economic incentives on performance toward GSCM.
Second, this work conceptualized a profitless recycling practice among closed-loop supply
chain members in response to governmental economic instruments promoting movement
toward equilibrium conditions. Governments can play the role of a mediator to facilitate the
interaction between supply and reverse-supply chains, thereby promoting usage of EDRMs.
In this study, we argue that the recycled-material supplier should bear subsidies from
governments to encourage the recycling of EDRMs. Manufacturers will therefore decide to
produce more products with containment of recycled materials. At the same time, based on
the concept of extended producer responsibility, the manufacturers should be taxed for
producing eco-friendly products. Therefore, the manufacturer’s decisions, such as that
related to production quantities, principally rely on the recycled-material supplier’s
operational strategies toward equilibrium conditions driven by governmental economic
incentives.