Three-layer supply chain
policy under sharing
recycling responsibility
Uttam Kumar Khedlekar and Priyanka Singh
Department of Mathematics and Statistics,
Dr Harisingh Gour University,
Sagar, India
Abstract
Purpose – For smooth running of business affairs, there needs to be a coordination among
manufacturer, collector and retailer in forward and reverse supply chain. This paper handles the problem
of making pricing, collecting and percentage sharing decisions in a closed-loop supply chain. The
purpose of this paper is to examine the effect of responsibility sharing percentage on the profits of a
manufacturer, a retailer and a collector. The paper further aims to understand the mutual interactions
among decision variables and profit functions. It also determines the optimal selling price, optimal
time, wholesale price, sharing percentage and optimal return rate in such a manner that the profit function
is maximized.
Design/methodology/approach – The authors presented a three-echelon model consisting of a
manufacturer, a retailer and a collector in the closed-loop supply chain and optimized the profits of each
supply chain member. The authors introduced SRR models for the remanufacturing by providing some
percentage of physical and financial support to the collector. Optimization techniques have been applied to
obtain optimal solutions. Numerical examples and graphical representations of the optimal solutions are
provided to illustrate the model.
Findings – This study stresses on profitable value retrieval from returned products, and it discusses how
responsibility sharing can improve profitability and reduce the workload of an individual. In total, three main
results are found. First, sharing and coordination among chain members can improve collector’s profit.
Second, supply chain performance may also improve over time. Third, the profit of each member of the supply
chain increases with an increase in sharing percentage up to a certain limit. So, the manufacturer can share
the responsibility of the collector under a fixed limit.
Research limitations/implications – The main limitation of this model is that there is no difference
between manufactured and remanufactured products. There are many correlated issues that need
to be further investigated. The future study in this direction may include multi-retailer, stochastic
demand patterns.
Practical implications – It is directly utilized by supply chain industries in which coordination among
chain members is still needed to maximize profits. This information enables the manufacturer to assist the
collector financially or physically for the proper management of the three-layer supply chain. The present
work will form a guideline to choose the appropriate parameter(s) and mathematical technique(s) in different
situations for remanufacturable products.
Social implications – From the management point of view, this study delivers the strongest result to
remanufacturing companies and for whom effective and efficient coordination among chain members is vital
to the overall performance of the supply chain.
Originality/value – There are very few studies that consider the remanufacturing of used products under a
fixed time period. The authors considered selling price-sensitive and time-dependent exponentially declining
demand. This model is developed by considering all possible help to a collector from manufacturer to collect
used products from consumers. This research complements past research by showing coordination among
supply chain members within a fixed time horizon.
Keywords Remanufacturing, Supply chain management, Closed loop, Physical and financial sharing,
Return rate, Sharing recycling responsibility (SRR)
Paper type Research paper
Journal of Advances in
Management Research
© Emerald Publishing Limited
0972-7981
DOI 10.1108/JAMR-01-2019-0002
Received 3 January 2019
Revised 21 February 2019
30 March 2019
Accepted 12 April 2019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0972-7981.htm
The authors would like to thank and express their special gratitude to the referee(s) for giving their
attention and time to the paper.
Three-layer
supply chain
policy under
SRR