Manufacturer’s recycling alliance strategies in a closed-loop supply chain with recycling competition under carbon trading policy

Remanufacturing can efficiently decrease carbon emissions and attain a balance of economy and environment, with recycling being an essential prerequisite for remanufacturing. The closed-loop supply chain (CLSC) is established under carbon trading policy, and there is recycling competition between the retailer and third-party recycler. Thus, this study aims to give guidance for promoting recycling and remanufacturing. Then, three Stackelberg game models are built based on the manufacturer’s three recycling alliance strategies: no alliance, manufacturer-retailer alliance, and manufacturer-third-party-recycler alliance. Subsequently, sensitivity analyses are conducted to determine how the carbon trading price and recycling competition affect CLSC members’ decisions. This addresses the existing research gap by studying manufacturer’s optimal recycling alliance strategy in the context of both carbon trading policy and recycling competition. Results show that the recycling alliance can effectively improve the recycling price (or quantity). Meanwhile, the third-party recycler is the optimal alliance partner for the manufacturer, and the CLSC can benefit from the manufacturer-retailer alliance.