Design of the expense allocation mechanism in e-waste recycling deposit system under EPR framework

In order to address the serious issue of informal e-waste recycling in China, though carefully analyzing correlative monetary, information and product flow for China's e-waste special fund administration, we propose to establish a framework of a deposit refund system under the EPR (Extended Producer Responsibility) principles. The deposit refund system can increase the incentives of consumer recycling and ensure the construction of a formal recycling channel. Given the economic responsibilities of the multiple parties involved, we also come up with an optimized design of the reverse supply chain expense mechanism for e-waste recycling. In addition, after analyzing the concept and the core role of the deposit fund, we introduce it as a corresponding parameter in the supply chain model. This research extends a typical reverse supply chain model to one that involves manufacturer, third-party recycler, and consumer, as while as considers government decision and consumer activities. The proposed expenses allocation incentive mechanism is constructed on the foundation of the supply chain optimization theory. This research provides a new perspective on supply chain analysis by focusing on the issues of e-waste recycling, its environmental impacts, and incentives to informal recycling in China. Meanwhile, this study also takes into account the appropriate role of the Chinese government and the influence of the deposit fund to the supply chain and is intended to resolve the problem of the shared responsibility in e-waste recycling.