Socially optimal and fund-balanced advanced recycling fees and subsidies in a competitive forward and reverse supply chain |
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| Institution: | 1. Institute of Industrial Engineering, National Taiwan University, 1, Section 4, Roosevelt Road, Taipei 106, Taiwan;2. Department of Industrial Engineering and Management, National Chiao Tung University, 1001 Ta Hsueh Road, Hsinchu 300, Taiwan;1. Institute of Circular Economy, Beijing University of Technology, Beijing, China;2. School of Natural Resources and Environment, University of Michigan, Ann Arbor, MI, United States;3. Department of Civil and Environmental Engineering, University of Michigan, Ann Arbor, MI, United States;1. Center for Management Studies (CEG-IST), University of Lisbon, Avenida Rovisco Pais, 1049-001 Lisbon, Portugal;2. Hogeschool-Universiteit Brussel (HUBrussel), Faculty of Economics and Management, Warmoesberg 26, 1000 Brussels, Belgium;3. Katholieke Universiteit Leuven (KULeuven), Faculty of Business and Economics, Naamsestraat 69, 3000 Leuven, Belgium;4. DECivil - Instituto Superior Técnico, University of Lisbon, Avenida Rovisco Pais, 1049-001 Lisbon, Portugal;1. Centre of Northern Environmental Technology, Thule Institute, P.O. Box 7300, FIN-90014 University of Oulu, Finland;2. Kemin Digipolis Oy, Tietokatu 6, FIN-94600 Kemi, Finland;3. Oulu Business School, P.O. Box 4600, FIN-90014 University of Oulu, Finland;4. Mass and Heat Transfer Process Engineering, Faculty of Technology, P.O. Box 4300, FIN-90014 University of Oulu, Finland;1. University of Udine, Italy;2. IEFE, Bocconi University, Milano, Italy;1. Institute of Development Studies, University of Sussex, United Kingdom;2. Manchester Institute of Innovation Research, The University of Manchester, United Kingdom;3. Eco-Engineering and Management Consult Limited, Ghana;4. KEDGE Business School, France |
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| Abstract: | Advanced recycling fees (ARFs) and government subsidy fees are important for curtailing the consumption of new products and encouraging recycling and disposal of end-of-life (EOL) products. We introduce a model consisting of a leader (the Environmental Protection Agency, EPA) and two groups of followers (MIS firms and recyclers) consisting of manufacturers, importers and sellers, and recyclers which compete in both consuming and recycling markets. The EPA determines the ARFs paid by the MIS firms and the fees subsidizing recyclers to maximize the social welfare in closed-loop supply chains where the MIS firms and recyclers attempt to maximize their respective profit functions. To compare with current practice, we describe a conceptual fund balance model to determine the ARF and subsidy fee on the basis of the balance between total collected ARFs and expenditure of subsidies. Using numerical examples for the laptop computer market in Taiwan, we demonstrate that our results outperform the current practice. |
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| Keywords: | Advanced recycling fee Subsidy fee Recycle Closed-loop supply chain Competitive entities |
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