This study attempts to optimize the operations of the Recycling Fund Management Board (RFMB), founded by the Environmental Protection Administration of the ROC Government (in Taiwan), by using a subsidy rate decision for domestic printer recyclers. The hierarchical and interactive relation between the two parties is modeled by bi-level programming, where the RFMB serves as the upper-level decision unit, recyclers are the lower-level counterpart, and the consumer’s action is embedded in the constraints of the lower level problem. The problem is solved by the Karush–Kuhn–Tucker transformation approach. Practical data including sales of printers per year, a survey of recycling intention, recycler cost structure, and resource recycling value are used to solve the problem. The resulting solution discovers the inefficiency of the current operations of RFMB, and suggests an appropriate recycling fee and subsidy rate that balance the interests of printer manufacturers, recyclers, and the RFMB.
Operational Research An International Journal 17, p.901-909