This paper studies how government subsidies (GS) and extended warranties (EW) feed decision-making about low-quality recycled used products (RUP) in closed-loop supply chains (CLSC).
The authors use the Stackelberg game and numerical simulation to analyze how the quality of RUP affects decision-making about remanufacturing and EW.
The results show that (1) low-quality RUP will weaken the environmental and economic value of EW and harm the profits of the CLSC, and the retailer is more vulnerable to low-quality RUP than the manufacturer; (2) the participation of GS can weaken the negative impact of low-quality RUP on the CLSC, while the participation of EW cannot; (3) the participation of GS or EW can increase the recycling rate of used products and revenues of the CLSC; (4) the linkage of the two can further enhance the economic and environmental value of EW and significantly improve the resource utilization efficiency and benefits of the CLSC.
The authors study the impact of GS, EW and the linkage between the two on resource utilization and revenue of the CLSC.
