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The Contract Design of the Three-party Collecting Reverse Supply Chain

Author: WuXiaoZuo
Tutor: XiongWeiQing
School: Ningbo University
Course: Business management
Keywords: Circular Economy Reverse Supply Chain Third-Party Recovery Evolutionary Game Contract Design
CLC: F713.2
Type: Master's thesis
Year: 2012
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The implementation of the reverse supply chain is key to the development of recyclingeconomy and the inevitable choice for the development of enterprise in the market. Urgent problemof the implementation of the reverse supply chain is how to design effective contract so that themembers can reached a long-term and stable cooperation. The contract designing of the reversesupply chain which contain a single manufacturer and a single recycler was studied in the paper.The main contents are as follows:1.The cooperation evolution model of manufacturer and recycler is setted up based onevolutionary game theory. The numerical experimentation illustrates that enterprises will notcooperate with each other in government non-intervention and non-contract case.2.Contract Design under the uncertain quality of the waste materials. Three types of contractare designed and reward and punishment contract is introduced to coordinate the reverse supplychain under the complete information. Separating equilibrium model、pooling equilibrium modeland semi-separating equilibrium model are setted up to solve imbalance in supply chain underincomplete information. The main conclusions of the study are summarized as follows:Manufacturer is able to identify the type of recycler in separating equilibrium and is the opposite inthe pooling equilibrium, manufacturer should improve the cost of "lie" to refine the poolingequilibrium; The recycler general not “lied” about the quality of the waste materials in thesemi-separating equilibrium.3.In the case of unilateral moral hazard, the supply chain is able to achieve coordinationthrough contract when recycler is risk nature. The impacts of the uncertainly in recycling marketand the degree of risk aversion of the recycler for contract design are discussed by numericalsimulation. The research shows that manufacturer should choose the low risk circumvent andstable recovery market to achieve greater efficiency.4.In the case of double moral hazard, contract design under the incomplete information isstudied based on the model under the case of symmetric information. Analysis show that, bycomparing with the conclusions in the case of unilateral moral hazard, the pareto optimal solutioncan not be achieved, even if the recycler is risk nature. The impacts of the proportion of recycler’sincome to total income、 uncertainly in recycling market and the degree of risk aversion of therecycler for contract design are discussed by numerical simulation. 5.Analysis of the recycling current situation of china’s home appliance industry, we found theeffective contracts would improving the cooperation enthusiasm between manufacturer andrecycler.

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CLC: > Economic > Trade and Economic > Domestic Trade and Economic > The circulation of commodities and the market > Goods acquisition
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