Analysis on Recycling Channel Selection of Construction and Demolition Waste in China from the Perspective of Supply Chain

Although construction and demolition waste (C&D waste) recycling has been widely regarded as an effective way to save resources, its selection of recycling channels has received little attention. In order to improve the recycling efficiency of C&D waste and promote the process of C&D waste management, we innovatively propose a dual-channel recycling problem of C&D waste from the perspective of supply-chain operation, aiming to study the impact of the selection of recycling channels and the government’s economic intervention on pricing decisions. Specifically, we build in this paper a three-echelon construction material supply chain including a construction contractor, a professional recycling agency, and a building materials manufacturer, considering two modes: the construction contractor does the recycling job alone (as the direct channel) and the construction contractor entrusts the recycling job to the professional recycling agency (as the indirect channel). We use game theory to analyze the optimal decision strategies of the members with or without governmental intervention and the equilibrium strategies are obtained. At the same time, taking Chongqing city as an example, we apply the model to carry out numerical simulation, and the results reveal that greater recycling costs of C&D waste leads to lower profits for the members. When the market capacity of first-class renewable building materials increases, the recycler’s recycling cost of C&D waste decreases, and the remanufacturing cost of recycled materials processed into first-class renewable building materials decreases, the supply-chain members will choose the indirect channel to perform the recycling job. In the case when government intervention exists, the recycling quantity of C&D waste increases, the price of the final products decreases, and both the total profit of the system and the profit of the supply-chain members increase; there is a positive correlation with the government subsidies. The study provides some insights on managerial significance to C&D waste recycling management.