Dual channel closed-loop supply chain coordination with exchange policy, sales efforts and green innovation under uncertain market

Abstract

ABSTRACT This paper explores a dual-channel supply chain within an uncertain environment where a manufacturer produces a green product and a retailer makes sales efforts to attract a higher customer base. Moreover, we incorporate a reverse supply chain model in which the manufacturer retrieves end-of-used products from customers through a collection initiative. Simultaneously, the retailer gathers end-of-used products from customers by implementing an exchange policy facilitated through a coupon applied to the product’s selling price. Then, we explore centralized, manufacturer Stackelberg, option contracts and cost-sharing contracts strategies to maximize supply chain profits under various circumstances. Subsequently, a numerical example is undertaken to showcase the utility of the models and explore sensitivity that examines how different parameters impact the supply chain’s profit. Findings suggest that the supply chain members will be profitable if they engage in the option contract model under a suitable value of the option price and exercise price.