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Chinese Journal of Management Science ›› 2020, Vol. 28 ›› Issue (12): 87-97.doi: 10.16381/j.cnki.issn1003-207x.2020.12.009

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Recovery Decision of Altruistic Fairness Concern on E-Commerce Closed-Loop Supply Chain

WANG Yu-yan1, SU Mei1, SHEN Liang2, LIANG Jia-ping1   

  1. 1. School of Management Science and Engineering, Shandong University of Finance and Economics, Jinan 250014, China;
    2. School of Public Finance and Taxation, Shandong University of Finance and Economics, Jinan 250014, China
  • Received:2019-04-10 Revised:2019-12-31 Online:2020-12-20 Published:2021-01-11

Abstract: At present, the recycling of waste as a development strategy has received increasing attention. Through the e-commerce platform, the waste products are recycled from customers and disposed of or reused, which forms E-commerce Closed-loop Supply Chain (EC-CLSC). In order to avoid the conflict with the e-commerce platform because of the profit division, the altruistic fairness concern behavior is adopted by the remanufacturer. In order to analyze the impact of altruistic fairness concern on the operation of EC-CLSC, a decision model composed of a single remanufacturer and a single e-commerce platform is constructed in this paper. Then, the optimal decision of each decision-making model is given and the impact of the altruistic fairness concern on recovery pricing, commission and members' profits are analyzed.
Three decision models of EC-CLSC are constructed in this paper. The first is decentralized decision-making without altruistic fairness concern. In this model, the profit function of the remanufacturer is πm=(h-ρ-p)q, and the profit function of e-commerce platform is πe=ρq-2/2.The second is the decentralized decision-making with altruistic fairness concern. In this model, the decision-making function of the remanufacturer is its utility function Um=πm-θme).The third is joint decision-making. Then, the optimal decisions of three models are solved and analyzed. On this basis, the contract of "recovery cost sharing and joint revenue sharing" of EC-CLSC is designed to realize the coordination of the system. Finally, numerical analysis is used to verify the conclusions of the models. The results show that:(1) the altruistic fairness concern of remanufacturer is a strategy that has to be adopted in order to improve the recovery rate of waste products and maintain the stable development of the EC-CLSC system. This kind of fairness concern is disadvantageous to the remanufacturer. But when the degree of altruistic fairness concern is not more than 0.5, it will improve the profits of the e-commerce platform and the EC-CLSC system. Therefore, remanufacturers generally do not take the initiative to choose altruistic fairness concern, but are often under pressure to consider altruistic fairness concern, and the degree is limited. But in the long run, the altruistic fairness concern of remanufacturers reflects the sense of corporate social responsibility, which can stabilize the operation of EC-CLSC. (2) As the economic benefits of recycled products become more and more significant, consumers become more sensitive to recovery prices, and the recovery prices, the commission, and the profits of members all increase. (3) In the joint decision-making, the recovery price of waste products is the highest and the commission is the lowest. The system coordination can be realized through the contract of "recovery cost sharing and joint revenue sharing". Under this coordination mechanism, the proportion of costs shared by remanufacturers is exactly equal to the share of system profit. And in the coordination mechanism, with the decrease of commission, the proportion of remanufacturers sharing the service cost of e-commerce platform and the proportion of e-commerce platform sharing the profits of remanufacturers will increase.
Thus it can be seen that in practice, remanufacturers should actively communicate with e-commerce platforms, not only pay attention to their own profits, but also pay attention to the benefits of e-commerce platforms. And, the remanufacturers should take the initiative to share the cost of e-commerce platform recovery services, make appropriate "altruism fairness concern" to e-commerce platforms, and prevent dissatisfaction from the e-commerce platforms.
The conclusion of this paper can not only enrich the theoretical basis of e-commerce supply chain, but also provide theoretical reference for the recycling decision of EC-CLSC members.

Key words: e-commerce platform, altruistic fairness concern, e-commerce closed-loop supply chain, coordination mechanism

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