A Study of Product Quality and Marketing Efforts in Closed-Loop Supply Chains With Remanufacturing

Abstract

In this paper, the closed-loop supply chain (CLSC) models are extended to consider the case that the manufacturer can improve the product quality and the retailer can have effective marketing activities to promote the product. One centralized and three decentralized CLSC models are mathematically formulated in this paper. For the centralized CLSC model, the optimal solutions are derived in closed-form format analytically. For three decentralized CLSC models, by assuming the manufacturer is the leader, the equilibrium solutions are also obtained in closed-form format under the Stackelberg game settings. Based on the optimal/equilibrium solutions and the corresponding objective function values for the proposed models, several interesting managerial insights, and economic implications are obtained. Moreover, the proposed models with product quality improvement and marketing efforts are compared with the models with only product quality improvement effort and the models with only marketing effort. The results show that the performance of the proposed models with both product quality improvement and marketing efforts is better in the decentralized CLSC models.