Sustainable development by waste recycling under a three-echelon supply chain: A game-theoretic approach

In this study, the economic and environmental aspects of sustainability are considered on the waste recycling process under a three-echelon dual-channel supply chain containing one collector, one recycler, and one manufacturer. To our knowledge, this study is the first one focused on the recyclables under a dual-channel structure. Under the considered structure, the customers' demand for the finished product is specified. Then, the manufacturer procures the product from a recyclable waste with a specific recyclability degree. The collector collects the waste while the recycler recycles it. The manufacturer is also capable to recycle the waste. Thus, he can purchase the recycled materials from the recycler or gets the non-recycled waste from the collector and then recycles it. Under the various power structures, the game-theoretic models are established among the members. Then, the equilibrium strategies are obtained and various managerial insights are revealed. It is found that under the various games, the manufacturer selects the collector when some thresholds are met. When the collector and recycler have similar decision powers, the manufacturer gets higher profit than the situation that they make decisions with different decision powers. Moreover, more the recyclability degree of the waste leads to higher profits for the members.