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Chinese Journal of Management Science ›› 2015, Vol. 23 ›› Issue (5): 41-47.doi: 10.16381/j.cnki.issn1003-207x.2015.05.006

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Closed-loop Supply Chain Coordination When Effort Elasticity Coefficient and Production Cost Disruptions Simultaneously

QIN Yan-hua1, CAO Xi-yu2, CHEN Ben-song2   

  1. 1. Management School, Zhong Shan Institute, University of Electronic Science and Technology, Zhongshan 528402, China;
    2. School of Economics and Commerce, Zhong Shan Institute, University of Electronic Science and Technology, Zhongshan 528402, China
  • Received:2013-09-08 Revised:2014-08-19 Online:2015-05-20 Published:2015-05-20

Abstract: In recent years, the frequent occurrence of emergencies has made us realize that we are living in a society full of emergencies. Emergency will have a huge impact on the normal operation of enterprises and supply chain. Meanwhile, with people's awareness of environmental protection and the sustainable development being deepened gradually, more and more enterprises attach great importance to the recycling of used product, and start to implement the closed-loop supply chain to integrate in enterprise's strategic plan. Thus, these questions lead to a wide attention about how to coordinate the closed-loop supply chain to response to emergencies. The significance and purpose of this paper is the strategies on how to response the emergency so as to improve the operation efficiency of the closed-loop supply chain by studying the emergency management of the closed-loop supply chain. In this paper, the closed-loop supply chain composed of one manufacturer and one retailer is considered, in which the manufacturer is responsible for the production and reproduction, and the retailer for selling its product and reclaiming used products. While the emergency causes the sale effort elasticity coefficient, the collection effort elasticity coefficient, the manufacturing cost and the remanufacturing cost disrupted simultaneously, the paper explores how we should use the rebate and penalty contract to coordinate the closed-loop supply chain to response to the emergency. The closed-loop supply chain models are set up, the optimal strategies of the closed-loop supply chain under the normal situation are analyzed, furthermore the impact on the closed-loop supply chain coordination is analyzed based on the rebate and penalty contract. As the disruption may make the closed-loop supply chain production plan change and furthermore it would make the manufacturer adjust the production quantity, but the production quantity adjustment needs to pay additional cost. So in the emergency situation, a closed-loop supply chain model is set up by leading into additional cost, the effect of the closed-loop supply chain coordination with the original rebate and penalty contract is analyzed. The study results show that the emergencies have great influence on closed-loop supply chain, but the closed-loop supply chain can be coordinated and the loss of the closed-loop supply chain profit can be reduced effectively through adopting the adjusted rebate and penalty contract and adjusted corresponding manufacture (collection) strategy, sale price(collection price) strategy and sale effort(collection effort) strategy. In the data emulation and analysis, a living example according to the feature of the closed-loop supply chain is designed, and furthermore the effect is anglyzed,which caused by product quantity, reclaim quantity, sale price, reclaim price, sale effort, reclaim effort and the profit of the closed-loop supply chain while the sale effort elasticity coefficient, the collection effort elasticity coefficient, the manufacturing cost and the remanufacturing cost are disrupted simultaneously caused by the emergency. By the numeral example, we test and verify the correctness of the conclusion and the validity of the model on response to the emergency are tested, and it is found that the closed-loop supply chain coordination can be reached by adjusting the part of product quantity, reclaim quantity, sale price, reclaim price, sale effort, reclaim effort based on the adjusting rebate and penalty contract. In brief, a fundamental train of thought and a frame for the closed-loop supply chain to response to the emergencies to other researches are offered, and moreover, it can be used for reference to other related studies on how to utilize the rebate and penalty contract to coordinated the closed-loop supply chain to response to emergencies.

Key words: emergency, closed-loop supply chain, effort level, rebate and penalty contract, coordination

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