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The optimization of a multi-period multi-product closed-loop supply chain network with cross-docking delivery strategy
doi: 10.3934/jimo.2022002
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## Optimal financing strategy in a closed-loop supply chain for construction machinery remanufacturing with emissions abatement

 1 School of Economics and management, Southeast University, Nanjing, China 2 College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing, China

*Corresponding author: Weida Chen

Received  April 2021 Revised  August 2021 Early access January 2022

Fund Project: This work was supported by the National Natural Science Foundation of China grant 71971058, and the Postgraduate Research & Practice Innovation Program of Jiangsu Province grant KYCX21_0170

Motivated by the remanufacturing practice of construction machinery, this paper examines the impacts of different cooperation financing and carbon emission reduction (CER) strategies on the operational decisions in a closed-loop supply chain (CLSC) where the original equipment manufacturer (OEM) produces only new products and the capital-constraint retailer produces remanufactured products and sells both new and remanufactured products to consumers. Based on the cooperation level between the OEM and the retailer, four different financing strategies, including the non-cooperation financing (NCF), the supply chain carbon financing (SCCF), the partial cooperation with delay-in-payment financing (PCD), and the full-cooperation financing (FC), are explored. Meanwhile, we extend the proposed models by considering the CER strategy implemented by the OEM, and then investigate its impact on the optimal operational and financing decisions of the retailer. The results show that: i) Under different financing strategies, the CER strategy has no impact on the retail price of remanufactured products, but can help increase the market share of new products and strengthen the market value effect for the OEM. ii) Compared with the scenario without CER, the SCCF strategy can not only ease funding pressure than the NCF strategy for the retailer but also increase the CLSC profit under the CER strategy. iii) No matter which financing strategy is adopted, the CER strategy always has a squeezing effect on the market size of remanufactured products, i.e., the cannibalization effect. iv) The CER strategy is not conducive to the development of the remanufacturing industry, but can improve the environmental performance in terms of reducing emissions and increasing the market sales for new products.

Citation: Shuaishuai Fu, Weida Chen, Junfei Ding, Dandan Wang. Optimal financing strategy in a closed-loop supply chain for construction machinery remanufacturing with emissions abatement. Journal of Industrial and Management Optimization, doi: 10.3934/jimo.2022002
##### References:

show all references

##### References:
Non-cooperation with financing
Supply chain carbon financing (SCCF)
Partial-cooperation with delay-in-payment financing (PCD)
Full-cooperation financing (FC)
The effect of carbon reduction cost coefficient on the emission reduction rate
The effect of carbon reduction cost coefficient on the retail price of new product
The effect of interest rate on loan amount
The effect of interest rate on CER rate
The profits of CLSC under different financing strategies
The difference between this paper and prior studies
 Paper CER CLSC Manufacturing/Remanufacturing Financing Strategy NCF SCCF PCD FC Sun et.al(2012) √ √ √ Yi et al. (2016b) √ √ Wang et al. (2017b) √ √ √ Wang et al. (2017) √ √ √ √ Tang et al. (2018) √ √ √ √ Cao et al. (2019) √ √ √ An et al.(2020) √ √ √ √ Yang et al.(2018) √ √ √ √ √ This paper √ √ √ √ √ √ √
 Paper CER CLSC Manufacturing/Remanufacturing Financing Strategy NCF SCCF PCD FC Sun et.al(2012) √ √ √ Yi et al. (2016b) √ √ Wang et al. (2017b) √ √ √ Wang et al. (2017) √ √ √ √ Tang et al. (2018) √ √ √ √ Cao et al. (2019) √ √ √ An et al.(2020) √ √ √ √ Yang et al.(2018) √ √ √ √ √ This paper √ √ √ √ √ √ √
Notations for parameters and variables
 Decision variables $w$ Wholesale price of new product $P_i$ Retail price of $i$, where $i=m,r$ indicates new and remanufactured products, respectively $\Gamma_m$ The carbon emission reduction rate Parameters $c_i$ Unit production cost of $i$ $Q_i$ Production quantities of $i$ $\delta$ Discount factor of consumer value for remanufactured products $P_c$ Carbon price $r$ Bank loan interest rate $L_j$ Loan amount of $j$, where $j=1,2$ indicates without CER, $j=3,4$ indicates with CER $e_i$ Initial carbon emission of product $i$ $\beta$ The percentage of carbon emissions between new product and remanufactured products $G_i$ Carbon quota of $i$ $N$ Initial capital of the retailer $m$ Carbon reduction cost coefficient $E_i$ The actual emission of $i$ $T_i$ Volume of emission trade of $i$
 Decision variables $w$ Wholesale price of new product $P_i$ Retail price of $i$, where $i=m,r$ indicates new and remanufactured products, respectively $\Gamma_m$ The carbon emission reduction rate Parameters $c_i$ Unit production cost of $i$ $Q_i$ Production quantities of $i$ $\delta$ Discount factor of consumer value for remanufactured products $P_c$ Carbon price $r$ Bank loan interest rate $L_j$ Loan amount of $j$, where $j=1,2$ indicates without CER, $j=3,4$ indicates with CER $e_i$ Initial carbon emission of product $i$ $\beta$ The percentage of carbon emissions between new product and remanufactured products $G_i$ Carbon quota of $i$ $N$ Initial capital of the retailer $m$ Carbon reduction cost coefficient $E_i$ The actual emission of $i$ $T_i$ Volume of emission trade of $i$

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