Chen, J. Y., and Sheu, J. B. 2017. Green Policy-Driven Closed-Loop Supply Chain for Recycling of Economically-Disadvantaged Recycled Materials. NTU Management Review, 27 (2): 163-184. https://doi.org/10.6226/NTUMR.2017.JAN.A103-006
Yenming J. Chen, Professor, Department of Logistics Management, National Kaohsiung First University of Science and Technology
Jiuh-Biing Sheu, Distinguished Professor, Department of Business Administration, National Taiwan University
Abstract
This paper investigates an effectiveness problem in the enactment of environmental policies aimed at profitless recycling of economically disadvantaged recycled materials (EDRMs). After thorough analysis, a policy instrument has been proposed. The arguments are established from a closed-loop supply chain model in a multiplayer hierarchical Stackelberg game, manifesting interactions between competing manufacturers, suppliers of virgin and recycled materials, and the government. Analytical results indicate that a tax-subsidy system is effective because this policy improves the profits of all parties involved in the recycling system. We suggest that governments should involve in the recycling practice of profitless materials.
Keywords
green supply chain managementgame theorytax-subsidy systemprofitless recyclingeconomically-disadvantaged recycled materials (EDRM)