Channel coordination of battery supplier and battery swap station of micro-grid with uncertain rental demand

Abstract

This paper studies a rental perishable supply chain in which perishable commodities can be recycled with demand uncertainty. Battery of electricity vehicle, rental service of DVD, construction equipment, cellphone, bestseller book, style costume and camera in tourist area are examples of rental perishable items with a fixed shelf life and recycling characteristic. Mainly taking battery swap station of electricity vehicles for example, this paper attempts to gain an insight into the role of return policy in rental perishable supply chain from the perspective of supplier. Under the condition of rental demand uncertainty, the supplier faces issue of how to maximize expected profit through return policy. Therefore, a bilateral monopoly model is developed to address this question. This paper illustrates that return policy tends to ensure system optimal for rental perishable supply chain as long as battery supplier choose appropriate wholesale price and buyback price. Moreover, return policy can achieve channel coordination and both parties benefit from the win–win situation under certain condition. It is possible for battery supplier to arbitrarily distribute the incremental profit of return policy by appropriately choosing values of wholesale price and buyback price.