Recycling, pricing decisions, and coordination in the dual-channel closed-loop supply chain: A dynamic perspective

Abstract

As the “Internet+” mode promotes transforming and upgrading the traditional recycling industry, dual-channel recycling has become the focus of commercial activities. Based on such background, this paper constructs the differential game models of the dual-channel closed-loop supply chain (DCCLSC) system in the complete non-cooperation (DN), incomplete cooperation (D), and complete cooperation (C) scenarios by applying game theory. The novelty is that recycling and pricing decision problems are investigated for the DCCLSC system from a dynamic perspective. A cost sharing-transfer payment contract is designed to realize the perfect coordination of the DCCLSC system. Moreover, the extended models with government intervention and inventory management are proposed. Finally, the numerical examples are used to verify the feasibility and validity of the addressed results. The results show that 1) online retail price is higher than offline retail price when μ>μN; 2) The retail price in the DN model is always lower than the D model, and their comparative relationship with the C model is closely related to the ratio of recoverability rate; 3) The recoverability rate and the profit of DCCLSC system are highest in the C model; 4) Competition and government intervention can create a win-win situation with improving environmental and economic benefits.