Abstract

Coordination problems in supply chain management are characterised by the conflict between the companies' willingness to cooperate on the one hand and the individual goals and private information of the players on the other. The design of contracts that enable an optimisation of the welfare of the entire value chain has already been intensively studied for traditional forward supply chains.

In this PhD project, we consider reverse supply chains for waste of electrical and electronic equipment in Germany, in which manufacturers, collectors, and recyclers are involved in the return of waste equipment to the material cycle on the basis of legal requirements. With technological development and the growing consumption of electronic products, the amount of used appliances that need to be collected and recycled is increasing. This waste of electrical and electronic equipment contains valuable raw materials and hazardous substances that present both economic opportunities and environmental challenges.

Our research focuses on the relationships between a manufacturer, a collector, and a recycler, both the availability of the secondary products and their demand being assumed to be uncertain. In particular, we want to investigate which types of contract can coordinate the reverse supply chain, taking into account legal requirements and logistic processes. To this end, we first formulate a centralised model as a benchmark for the contract-based coordination approaches, which can be solved with standard software for nonlinear programming. In addition, we design a generalised options contract for a collector and manufacturer, which limits the business risk for both parties. The contract parameters of the collector, who is in the position of a Stackelberg leader, include the capacity allocated to the producer, the option price, the exercise price when the option is activated and a fee per unit for additional short-term orders placed within the agreed capacity. The manufacturer optimises the number of options bought subject to an upper bound on the value at risk of this investment and accepts the proposal if the contract provides at least the reservation benefit offered by competing offers. We show that the contract guarantees the coordination of the dyadic supply chain under mild technical assumptions.