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Industrial Engineering National Taiwan University


Sustainable Economic Analysis

Off-plant Recycling Logistics Management in Decentralized Green Supply Chains

Due to the issues of global-warming, depletion of natural resources, and the environmental legislation, how to reduce, reuse, and recycle end-of-life products is an emerging problem nowadays. The closed-loop supply chain management consists of in-plant production management and off-plant logistics management. One of major operations in off-plant logistics is recycling in reverse supply chains. This research is to predict and determine the behavior and performance of independent entities in off-plant logistics chains for end-of-life products. The off-plant logistics management definitely involves in the operations of recycling and remanufacturing where these operations affect in-plant production management and demand chain management.


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We consider a general model of decentralized reverse supply chain systems comprised of an upstream boundary tier, intermediate tiers, and a downstream boundary tier. Each tier is populated by multiple independent entities and each independent entity has her own profit function and mechanism for decision-making. Often the decision variables for each entity in a decentralized system are also influenced by other entities’ decision. Most of the research on reverse supply chain design views the system in a centralized way; the key assumption is that one planner has the requisite information about all the participating entities and seeks the optimal solution for the entire system. However, many reverse supply chain structures consist of several independent entities. This research questions are in the following.

  • Determine the equilibrium acquisition price and volume of recycled flows in independent parties.
  • Examine the comparison of centralized and decentralized decision-making approaches.
  • Investigate the impact of the total collection amount in the system due to the government subsidy.
  • Determine the socially optimal subsidy fees and disposal fees for decentralized recycling systems.