Impact of government’s policies on competition of two closed-loop and regular supply chains

Abstract

With progressing technologies and new features of production, new products compete with older ones in markets. Indeed, new products initiate contest with olden ones and this process repeats in different productions lifetime several times. In this situation recycling the olden products seems to be significant for supply chains. Governments often levy special tariffs for these products as a control tool which aims to incentive production recovery. In the real world, government purposes financial incentive plans for recoverable productions and also punitive plans for unrecoverable products. This paper tries to model the competition of a closed-loop supply chain and an ordinary supply chain using a game theory approach. In next step, the effects of persuasive and punitive governmental plans are modeled. Finally optimal retail and wholesale prices of the products are found in two chains. Numerical examples including sensitivity analysis of some key parameters will compare the results between different models of this study.