Closed-loop Supply Chain with Advertising Investment and Reward-Penalty Mechanism Based on Different CSR Sharing Models

¹ College of Management, Shenzhen University, Shenzhen, China
² College of Management, Shenzhen University, Shenzhen, China

^a 15219642754@163.com
^b Corresponding author: ythuang4028@szu.edu.cn

Abstract

This paper considers a closed-loop supply chain (CLSC) consisting of a manufacturer and a retailer based on different corporate social responsibility (CSR) behaviors. In addition, the advertising investment and government’s reward-penalty mechanism (RPM) are also taken in account. To explore the impact of CSR behaviors on supply chain, we developed three models: (1) Only the manufacturer undertakes CSR (model M); (2) only the retailer undertakes CSR (model R); (3) the manufacturer and the retailer share CSR (model MR). By analyzing the results, we found that: (1) The advertising investment level and waste products return rate both increase with the increase of the extent to members undertake CSR when there is only retailer undertakes CSR and when the manufacturer and retailer share CSR, and remain unchanged when there is only the manufacturer undertakes CSR; (2) the overall social welfare increases with the increase of the extent to members undertake CSR no matter which member undertakes CSR, and reaches the highest when there is only the retailer undertakes CSR; (3) it is the most conductive for the performance of the closedloop supply chain when there is only the retailer undertakes CSR.