Closed-Loop Supply Chain Network under Oligopolistic Competition with Multiproducts, Uncertain Demands, and Returns

We develop an equilibrium model of a closed-loop supply chain (CLSC) network with multiproducts, uncertain demands, and returns. This model belongs to the context of oligopolistic firms that compete noncooperatively in a Cournot-Nash framework under a stochastic environment. To satisfy the demands,...

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Bibliographic Details
Published in:Mathematical problems in engineering 2014-01, Vol.2014 (1)
Main Authors: Zhou, Yan, Chan, Chi Kin, Wong, Kar Hung, Lee, Y. C. E.
Format: Article
Language:English
Subjects:
Channels
Closed loops
Competition
Computational efficiency
Demand
Economic models
Equilibrium conditions
Game theory
Inequalities
Mathematical models
Networks
Oligopoly
Product development
Remanufacturing
Supply chains
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Summary:We develop an equilibrium model of a closed-loop supply chain (CLSC) network with multiproducts, uncertain demands, and returns. This model belongs to the context of oligopolistic firms that compete noncooperatively in a Cournot-Nash framework under a stochastic environment. To satisfy the demands, we use two different channels: manufacturing new products and remanufacturing returned products through recycling used components. Since both the demands and product returns are uncertain, we consider two types of risks: overstocking and understocking of multiproducts in the forward supply chain. Then we set up the Cournot-Nash equilibrium conditions of the CLSC network whereby we maximize every oligopolistic firm's expected profit by deciding the production quantities of each new product as well as the path flows of each product on the forward supply chain. Furthermore, we formulate the Cournot-Nash equilibrium conditions of the CLSC network as a variational inequality and prove the existence and the monotonicity of the variational inequality. Finally, numerical examples are presented to illustrate the efficiency of our model.
ISSN:1024-123X
1563-5147
DOI:10.1155/2014/912914