Decision-Making and Contract Coordination of Closed-Loop Supply Chain with Dual-Competitive Retail and Recycling Markets

Sales competition and recycling rivalry are critical factors affecting the operation of closed-loop supply (CLSC). The existing research on competitive CLSCs primarily analyzes the impact of competition between two sales entities and/or two recycling entities on management decisions. To make the study more realistic, this study constructs a Stackelberg game model with the manufacturer as a leader, and analyzes the impacts of competition among n retailers (where n≥2) and rivalry among m third-party recyclers (where m≥2) on the decision-making and profits of both node enterprises and the supply chain system, and proposes a linear transfer-payment contract to coordinate the CLSC from an economic perspective. Numerical analyses are conducted to visualize the effects of competition on the decisions and profits. The key findings are as follows: (1) In the centralized system, inter-retailer competition reduces optimal order quantities but does not affect optimal retail prices. In the decentralized system, however, it decreases both optimal order quantities and retail prices. (2) Rivalry among recyclers reduces their optimal recycling volumes but does not affect their optimal recycling prices in the centralized system. In the decentralized system, however, such rivalry not only decreases recycling volumes but also increases optimal recycling prices. (3) The manufacturer’s product wholesale price and used product recycling price remain independent of competitive interactions among retailers and recyclers in the decentralized system. (4) Competition among retailers and recyclers positively affects the profits of the CLSC and the manufacturer, but negatively impacts those of retailers and recyclers. (5) When the reward–penalty factors for product order and used product recycling fall within a specific range, the linear transfer-payment contract can coordinate the CLSC in the presence of competition in both retail and recycling. (6) All enterprises’ profits are sensitive to the penalty–reward factor, but this sensitivities also gradually decrease as the number of retailers and (or) recyclers increases.