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Supply risk sharing in a closed-loop supply chain
اشتراک گذاری ریسک در زنجیره تامین حلقه بسته-2017 In closed-loop supply chains, the acquisition process of used products or materials often faces high volatility and
results in both the uncertain quantity and quality of the recycled products. Such supply uncertainties happen in
the reverse supply chain flows while the forward supply chain still faces market demand uncertainty. Managing
these uncertainties while coordinating the reverse and forward supply chain flows is one of the many challenges
faced by CLSC managers. Among different supply chain management approaches, supply chain contract design
has been proven as an effective method for improving supply chain performance. Based on the supply chain
contract design theories and focusing on the acquisition process in closed-loop supply chains, this paper
analyzes different supply risk sharing contracts including under-supply risk sharing contract, over-supply risk
sharing contract, complete supply risk sharing contract, and no risk sharing contract. With game-theoretical
models, equilibrium between the recycling price decision (controlling the reverse flow) and the remanufacturing
quantity decision (controlling the forward flow) are derived and analyzed. Further, numerical examples are used
to demonstrate the managerial results. Based on both the theoretic results and the numerical example
illustration, it is shown that different supply risk sharing contracts may result in both the recycling price
decision and the remanufacturing production quantity decision to deviate from those decisions under
centralized collection structure. Further, this paper investigates the impact of supply or demand risk reduction
on the CLSCs financial and environmental performances. It is observed that supply risk reduction approaches
may result in the alignment between the CLSCs financial and environmental goals while the demand risk
reduction approaches cannot achieve such alignment.
Keywords: Closed-loop supply chain | Supply risk sharing contracts |Acquisition management |
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