Modelling dual-channel closed-loop supply chain considering production diseconomies

Shan Liu,Dongyan Chen,Fengmin Yao,Yan Xing,I Barukčić

doi:10.1051/matecconf/202133609002

Shan Liu, Dongyan Chen + Show 3 more

Open Access

https://doi.org/10.1051/matecconf/202133609002

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Abstract

This paper studies the pricing selection and coordination strategies for dual-channel closed-loop supply chain (CLSC) considering production diseconomies. Under the centralized and decentralized decision-making, the decision models of CLSC of retailer recycling was constructed, the effects of the manufacturer’s production diseconomy and the sales competition between manufacturer and retailer on new product pricing and waste product recycling were analysed, the optimal pricing strategy of dual-channel CLSC was given, and a “two-part tariff” coordination contract was established based on centralized decision-making. The results indicate that the profits of each member are negatively correlated with the production diseconomy and positively correlated with the degree of sales competition, the direct sales volume of manufacturer is always more than twice that of retailer, and the stronger the competition degree is, the more obvious the advantage is. Further, within the range of contract parameters that the dominant manufacturer and retailer are willing to accept, the “two-part tariff” contract can effectively realize the coordination of dual-channel CLSC.

Highlights

In recent years, with the emergence of a large number of waste products and the increasingly serious problem of environmental pollution, closed-loop supply chain management (CLSCM) has attracted extensive attention from industry and academia [1]
Many enterprises are growing in scale, and a series of expansion and merger activities are frequently performed to seize market share. These business activities may lead to different degrees of decentralization in the organizational structure of enterprises, that is, the so-called phenomenon of production diseconomies
Xie et al discussed pricing and service strategy of dual-channel CLSC under benefit-cost sharing contract [6]. He et al studied the optimal pricing decision of dual-channel CLSC in which retailers sell new products and third parties sell remanufactured products based on government subsidies [7]

Summary

Introduction

With the emergence of a large number of waste products and the increasingly serious problem of environmental pollution, closed-loop supply chain management (CLSCM) has attracted extensive attention from industry and academia [1]. Based on chain competition supply chain structure, Ha studied the impact of production diseconomies on retailer information sharing [4]. Many enterprises implement CLSCM and carry out dual-channel marketing mode, and many scholars have conducted in-depth studies on this issue. Xie et al discussed pricing and service strategy of dual-channel CLSC under benefit-cost sharing contract [6]. He et al studied the optimal pricing decision of dual-channel CLSC in which retailers sell new products and third parties sell remanufactured products based on government subsidies [7]. Based on the equilibrium result of centralized decision, a two-part pricing contract is designed to coordinate the CLSC, and the range of contract parameters is obtained

Problem description and basic assumptions

Conclusion

Findings

Conclusions