Operational Research

, Volume 17, Issue 3, pp 901–919 | Cite as

Subsidy rate decisions for the printer recycling industry by bi-level optimization techniques

Original Paper


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.


Bi-level programming problem Printer recyclers Subsidy rate Recycling rate KKT approach 



The authors are grateful to Dr. Lih-Chyi Wen at Chung-Hua Institution for Economic Research, Taiwan, and Mr. Chipwu Cheng at the Recycling Fund Management Board, Environmental Protection Administration, ROC (Taiwan), for their valuable help.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2017

Authors and Affiliations

  1. 1.Department of Information ManagementTamkang UniversityTamsui, New TaipeiTaiwan, ROC
  2. 2.Department of Management SciencesTamkang UniversityTamsui, New TaipeiTaiwan, ROC

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