Group for Research in Decision Analysis

G-2018-78

Extended producer responsibility: regulation design and responsibility sharing policies for a supply chain

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In this paper, we study the problem of responsibility sharing for product recovery, and its relation to the design of Extended Producer Responsibility (EPR) regulations. By defining several scenarios for responsibility sharing policies, we show that designing an EPR regulation and allocating the responsibilities within the supply chain must be done simultaneously. Furthermore, we prove that sharing the penalties and rewards of collection and remanufacturing with the retailer has no financial or environmental impact if the manufacturer is collecting. However, making the retailer solely responsible to collect results in a higher collection rate, and in more new and fewer remanufactured products. Finally, a numerical analysis is performed for three electronic products to illustrate the use of our model. This research provides a set of guidelines for regulators seeking to improve environmental standards by designing and implementing EPR regulations.

, 28 pages