Pricing and greening strategies for a dual-channel closed-loop green supply chain

Abstract

This article considers a closed-loop green supply chain with both forward and reverse dual-channels, where a manufacturer produces and sells a single green product to the potential customers through both the direct online channel (e-tail/internet) and the traditional retail channel in the forward dual-channel, and collects the used products for remanufacturing from the customers through both the retail and the direct online channels in the reverse dual-channel (Model II). The pricing and greening strategies for the channel members and the whole supply chain are derived both analytically and numerically under centralized and three decentralized scenarios viz. manufacturer-led and retailer-led decentralized scenarios and Nash game. These results are compared with those in the case when reverse logistic does not exist (Model I). Two special cases are examined when the products are returned through only online channel and only retail channel. Sensitivity analysis is performed to explore the effect of key model-parameters on optimal decisions. From numerical analysis, it is observed that the retail price in the centralized scenario is higher than that in the decentralized scenario, which contradicts the result due to double marginalization, and the retailer-led decentralized policy provides higher profit than the other decentralized policies. Model II gives better result in terms of profit of the whole supply chain, whereas Model I suggests a more environment-friendly product. It is also observed that the channel members gain more profit when the retailer only collects the used products.