Industrial Engineering and Management Systems

Korean Institute of Industrial Engineers (대한산업공학회)
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Optimal Operation for Green Supply Chain in Consideration of Collection Incentive and Quality for Recycling of Used Products

  • Watanabe, Takeshi (Graduate School of Engineering, Osaka Prefecture University) ;
  • Kusuawa, Etsuko (Graduate School of Engineering, Osaka Prefecture University) ;
  • Arizono, Ikuo (Graduate School of Natural Science and Technology, Okayama University)
  • Received : 2013.01.28
  • Accepted : 2013.11.04
  • Published : 2013.12.31
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Abstract

In recent years, for the purpose of solving the problem regarding environment protection and resource saving, certain measures and policies have been promoted to establish a green supply chains (GSC) with material flows from collection of used products to reuse of recycled parts in production of products. In this study, we propose an optimal operation of the GSC while considering the collection incentive of the used products and quality for recycling of used products. Two types of decision-making approaches are used for product quantity, collection incentive of used products and lower limit of quality level of reusable parts in the used products for recycling in the GSC. One is the decision-making under an independent policy in decentralized supply chains where a retailer and a manufacturer make decisions so as to maximize profits individually. The other is the decision-making under a cooperative policy in centralized supply chains where a retailer and a manufacturer make decisions cooperatively so as to maximize the whole system's profit. Additionally, we also discuss supply chain coordination as a manufacturer-retailer partnership based on profit sharing. Furthermore, we show the effect of the quality of the reusable parts on the optimal decisions. The collection incentive of the used products was found to bring more profitability to the GSC activity.

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References

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