Pricing Models for Dual-channel Reverse Supply Chain Considering Regional Differences under “Internet Recycling” Mode in China

Abstract

In recent years, the Internet technology has been deeply influencing recycling industry to make it more intelligent and interconnected. However, most existing papers on “Internet Recycling” neglected the problem of pricing strategy under online and offline channels for different levels of recyclers. Moreover, the effect of regional differences has been emphasized a lot in dual-channel forward supply chain, but recycling field has seldom been concerned about it. In this paper, a recycling system consisting of one recycling center and several third-party recyclers (TPR) was investigated based on traditional mode and dual-channel mode. The dual-channel reverse supply chain model is transformed from traditional mode by the introduction of online channel. It involves two recycling modes, as recycling centre for online recovery and “Recycling center+TPR” for offline recovery. By establishing pricing strategies based on Stackelberg game model, the impacts of regional differences were analysed. Finally, numerical analysis was given to illustrate the effectiveness of the pricing mechanisms and strategies.