A sustainable closed-loop supply chain in a two-period: A game theory approach

Abstract

The closed-loop supply chain considers forward and reverse logistics. This paper assumes a two-period setting to demonstrate the interaction and effect of periods on the supply chain. In the first period, the manufacturer acts as a leader which produces new products and sells them to the retailer, and the retailer sells them to customers. In the second period, the manufacturer collects used-products to take profit. The objective of this study is to take care of economic, green, and social issues for both manufacturer and retailer in both periods. It presented a flexible solution method in two phases. A numerical example is presented and solved by applying the proposed solution method. Results indicate that the manufacturer as a leader obtains more profit, whereas the retailer is more sensitive towards the discount rate. Moreover, the retailer's profit is more sensitive to the proportion of returned used products than the manufacturer's profit.