Decision-making of contracting reverse logistics to retailers

Collection is the primary activity in reverse logistics. In this paper we address the problem of contracting the collection to the retailer for electronic waste. Since the legal or formal recycling enterprises are facing fierce competition from individual collectors and household workshop in China, they are in short of processing resources of electronic waste. The paper compared the strategy of subcontracting the collection to the retailer and collection by the recycler herself. We find the boundary incentives, and the result shows that using the retailer´s marketing network is helpful to increase the flow of electronic waste for formal enterprises. In addition, we find that the recycler and retailers are both inclined to control the collection themselves when electronic waste with high value.