Professional Documents
Culture Documents
1. Introduction
The accelerated pace of waste generation from used
electrical and electronic equipment is attracting more and
more global concern. Nowadays, the electronic companies
are being forced to bear more responsibility for their
products. For these electronic companies, the
responsibility is being extended to end-of-life
remanufacturing and recycling. Even though this change
could mean an increasing profitability and efficiency, for
many it is still seen as a challenge.
The Product Responsibility Provider (PRP) is a thirdparty take-back company which accesses the design
process of a new product introduced by an electronic
manufacturer. During the sale process of the product, the
manufacturer makes payment to its PRP for end-of-life
management. Many years later, when the product reaches
its end-of-life and should be collected, it is delivered to a
recycling centre that works in with the products PRP.
After disassembly and some disposal, the recycling centre
sells the e-waste to the PRP, the PRP sells the materials to
the manufacturer after classification and some processing
steps.
The recycling centre, the PRP and the manufacturer are
members of supply chain. If they are controlled
distinctively, it may lead to inefficient performance of the
system in some cases. The first reason is information
2. Basic Settings
In this part, it considers a three-tiered reverse supply
chain consisting of a recycling centre, a PRP and an
electronic manufacturer. All three members of the reverse
supply chain are risk neutral and assumed to pursue
expected profit maximization. See Figure 1 for the
diagram of the considered three-tiered PRP recycling
supply chain. The manufacturer sells electronic products
such as cell phones, a kind of short life cycle products,
with highly uncertain demand. The electronic products are
only sold in a period. As the lead time of the stuff and
materials are much longer than the selling seasons,
therefore, the manufacturer has no chance of placing a
second order.
(1)
sR bR < wR
wP > wR + cP
sP + bR bP < wP < p cM
S ( q ) = ( q D ) = q (1 F ( q )) + xf ( x ) dx = q F ( x ) dx
0
3. Benchmarks
3.1. The Centralized Supply Chain
The supply chain performs best when all the members
are centralized controlled (scenario C).When the channel
decides to order QC units of products for sales, the total
profit of channel T is
C
p + g s
Define R = p + g c c R c P c M
as the ideal
p + g s
*
C
M
D
p + g bP
*
D
*
C
( Q RP ) = B i ((1 A ) i ( p i S ( Q RP ) + b P i I ( Q R P )) (5)
+ ( w A w B c P ) i Q RP ) ( b P s P b R ) i I ( Q RP )
RP
RR
(6)
Where
RM
RP
and
RR
A i p + g c M wA
(7)
)
A i p + g A ib P
(B A iB )i p + B i( wA c P wB )
*
QRP
= F 1 (
) (8)
(B A iB )i p ((B A iB )ib P bP + s P + bR )
(1 B )i(1 A )i p + ((1 B )i(wA wB cP ) + wB c c R ) (9)
Q* = F 1 (
)
*
QRM
= F 1 (
RR
equivalently,
A i p + g c M wA
(B A iB )i p + B i( wA c P wB )
=
P
A i p + g A ib
(B A iB )i p ((B A iB )ib P b P + s P + b R )
=
(10)
And the goal to achieve full coordination is realized if the
contract prices and the proportions among the members of
*
the supply chain satisfy QRM
= QC , or equivalently,
A i p + g c M wA
p + g c cR cP cM
=
= R (11)
A i p + g A ib P
p+gs
The whole channel is fully coordinated as long as (10)
and (11) are satisfied. For simplicity, we denote
x1 = p + b P i R p i R
y1 = c M + g i R g
x 2 = x1 y 1 c P
(12)
y2 = b P iR s P iR b R iR
y3 = b R i R s R i R + c + c R
y1 + w A
x1
y2
B =
x 2 wB
A =
(13)
(14)
That is to say, when (13) and (14) are both satisfied, the
full coordinated supply chain can be achieved. When the
PRP decides the price wA, then the fraction of the
manufacturers revenue the manufacturer keepsA should
be decided based on (13). And the wholesale price wB and
the fraction of the PRPs revenue the PRP keeps B
should be negotiated based on (14).
Define the expected sales quantity of the coordinated
system as
Q
(15)
0 x d F ,
=
F (Q )
Noting that
F ( Q * ) = F ( Q c* ) = R
E (S (Q* ) +
Q*
+
R 1
R 1 Q* *
i I (Q* )) = xdF + * Q*dF +
i (Q x)dF
(16)
Q
0
R
R 0
Q*
1 Q*
xdF =
= i xdF = 0
0
R
F (Q)
Denote
M = cM wA
(19)
= ( i )i p + (w w cP )
P
R = (1 B )i(1 A )i p + (1 B )i(wA wB cP ) + wB c cR
as the equivalent marginal sales revenue of the three
members of the chain. Based on (17), (18) and (19), the
expected profit of the three members are
ERM (Q* ) = E(A i( piS (Q* ) + bP iI (Q* )) g iL(Q* ) (cM + wA )iQ* )
= (A i p + g cM wA )i E(S (Q* ) +
(20)
= (A i p + g cM wA )i g i
= M i
ERP (Q* ) = E((B B iA )i piS (Q* ) + ((B B iA )ibP bP + s P + bR )i I (Q* )
= ((B B iA )i p + B (wA wB c P ))iE(S (Q* ) +
(21)
R 1
iI (Q* ))
R
(22)
R 1
iI (Q* ))
R
RP
RR
So we have
= P = R
M
P
R
T
C
T
D
R
D
(24)
( Q C* ) = 6 1 6 7 5 .1 1
decentralized
In
supply
= 61147.11 ,
M
D
the
scenario
chain),
(the
QD* = 5289
and
denote
RM
R 1
iI (Q* )) g iE( D)
R
+B (wA wB c P )iQ* )
RM
RP
RR
0.25
0.2
0.15
0.1
0.05
0
0.6091
0.6098
0.6106
0.6113
0.6120
0.6128
0.6134
0.6142
0.6150
0.6157
0.6164
P
0.329564
0.330432
0.331282
0.332141
0.333000
0.333859
0.334718
0.335577
0.336436
0.337295
0.338154
0.476800
0.469686
0.415772
0.473458
0.475334
0.477231
0.479117
0.481003
0.482889
0.484775
0.486661
References
Excepted percentage
0.45
0.4
0.35
0.3
0.25
P
R
0.2
0.15
0.1
0.05
0.468
Acknowledgment
This work was supported by the Ministry of Education
of the Peoples Republic of China 06JA630059.
0.417148
0.416289
0.415430
0.414571
0.413712
0.412853
0.411994
0.411134
0.410275
0.409416
0.408557
0.47 0.472 0.473 0.475 0.477 0.479 0.481 0.483 0.485 0.487
5. Conclusion
Designing an effective recycling system has significant
impact on the recycling centre, the PRP, the manufacturer
and the market. This paper constructed a three-tiered
coordination system by revenue sharing. We further
showed that if the recycling centre, the PRP and the
manufacture have a common standard (in the above case,
the standard is that they can gain more profit than in
decentralized decision), they can design an appropriate
contract. The three-tiered reverse supply chain can be fully
coordinated by the revenue sharing contract and the total