Operational modes of E-closed loop supply chain considering platforms’ services

Abstract

Technology development has diversified the operational modes in the E-closed loop supply chain (ECLSC). The manufacturer may cooperate with online platforms for sales and recycling. This paper derives and compares the optimal decisions under the wholesale mode or direct sales mode in the forward channel and under the entrusted recycling or direct recycling mode in the reverse channel. The analysis shows that increasing consumers' sensitivity to online services and reducing the cost coefficients of online services are always beneficial to all ECLSC partners. Increasing consumers’ sensitivity to recycling price is always beneficial to the manufacturer and collecting platform while increasing consumers' sensitivity to sales price is always detrimental to the manufacturer and sales platform. The sales and recycling commission rates are the two important factors that affect the selection of sales and recycling modes. The stability of ECLSC can be achieved when the manufacturer and sales platform choose the same sales mode in the forward channel and the manufacturer and the collecting platform choose the same recycling mode in the reverse channel, which needs to be achieved by reasonably setting the sales commission rate for the direct sales mode and the recycling commission for the direct recycling mode.