Collection effort and reverse channel choices in a closed-loop supply chain

Abstract

We investigate the pricing and reverse channel choice decision issues in a closed-loop supply chain, within which the original equipment manufacturer (OEM) sells the new and remanufactured products through a retailer, while collects used products (cores) via dual recycling channels. We consider that collection competition exists between the dual recycling channels and the OEM has three options (i.e., OEM and Retailer dual collecting model, Retailer and Third party dual collecting model and OEM and Third party dual collecting model) to choose for collecting cores. We analytically show that the ranking of certain optimal values among the three optional models are independent of the competition intensity. Our result also shows that the OEM and Retailer dual collecting model is the best option for the OEM regardless of the competition intensity. We further compare our work with the existing optimal results in Hong et al. (2013) and Savaskan et al. (2004) for managerial insights on reverse channel choice.