Study of the Coordination Mechanism of a Wood Processing Residue-based Reverse Supply Chain

Zhanlu Long, Jinzhuo Wu, Wenxiu Xu, Wenshu Lin

Abstract


A revenue-sharing contract was introduced into a three-echelon wood processing residue-based reverse supply chain model to maximize the supply chain profit and realize a win-win situation for all participants. The optimal expected supply chain profits under different decision policies and the acceptable range of revenue-sharing coefficients were analyzed. Finally, the model was applied in a case study where sawdust was recycled to produce black fungus. Results showed that revenue-sharing can effectively enable supply chain coordination. Within the domain of the revenue-sharing coefficients, the production cost decreased by 5.91% and the corresponding demand increased by 16.09%, resulting in an increase of 7.73% in the supply chain profit. A comparison was made between the three-echelon and a two-echelon supply chains, and the results showed that the two-echelon supply chain would become less competitive than the three-echelon supply chain with the increase of recycling cost. Additionally, the profit shares of all parties in the three-echelon supply chain depended mainly on the revenue-sharing coefficients, which were determined by the positions of the parties and their bargaining power.

Keywords


Wood processing residues; Reverse supply chain; Revenue-sharing; Pricing mode; Coordination

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Welcome to BioResources! This online, peer-reviewed journal is devoted to the science and engineering of biomaterials and chemicals from lignocellulosic sources for new end uses and new capabilities. The editors of BioResources would be very happy to assist you during the process of submitting or reviewing articles. Please note that logging in is required in order to submit or review articles. Martin A. Hubbe, (919) 513-3022, hubbe@ncsu.edu; Lucian A. Lucia, (919) 515-7707, lucian.lucia@gmail.com URLs: bioresourcesjournal.com; http://ncsu.edu/bioresources ISSN: 1930-2126