An Investigation of the Optimal Closed-Loop Supply Chain for Electronic Products

The global expansion of the electronic product markets combined with an imperfect recycling system led to the increased production of waste electrical and electronic equipment (WEEE) and environmental pollution. As such, a growing number of countries are becoming aware of the importance of WEEE recycling to environmental protection, and they exert efforts to formulate related legislation. This study investigates the closed-loop supply chain (CLSC), which recycles WEEE through third-party recyclers. The manufacturers in the CLSC employ the recycled part of WEEE to produce remanufactured items, while they use new components to produce new items. However, consumers’ low willingness to pay (WTP) for remanufactured items makes the profitability of recycling and remanufacturing WEEE questionable. We examine three types of CLSC decision-making models, including decentralized, centralized, and coordination models, to investigate how government intervention and consumers’ WTP for remanufactured items influence the CLSC decisions and CLSC members’ profits. The results provide implications regarding the impact of government subsidies and consumers’ WTP for remanufactured items on the CLSC decisions. The results indicate that the centralized CLSC is more profitable than the decentralized CLSC, and that the coordination model with revenue sharing contract and quantity discount contract can effectively manage the CLSC.