Refurbishment of Recovered Products and Pricing Strategies under Environmental Awareness in a Dual-Channel Closed-Loop Supply Chain with Product Exchange Offer

Historically, both the theory and practice of supply chain management have placed an emphasis on manufacturing and distribution operations, i.e., the forward channel, which consists of suppliers, manufacturers, distributors, retailers, and customers. Recently, increased attention to product recovery practices has extended the scope of traditional supply chain management by drawing attention to collection, demanufacturing, and remanufacturing operations, i.e., the reverse channel, which consists of final‐users, collectors, demanufacturers, and remanufacturers. To optimize the performance of the extended supply chain, there is a need to establish an effective and efficient infrastructure via optimal network design. As a result, network design for product recovery has attracted the attention of a growing number of researchers in the past decade. In an attempt to draw more academic attention to this area, this annotated bibliography provides a detailed account of the published literature. The article is organized into two main sections that focus on (i) reverse supply chain network design, which is concerned with establishing an infrastructure to manage the reverse channel only and (ii) closed‐loop supply chain network design, which is concerned with establishing an infrastructure to manage both forward and reverse channels in a coordinated manner. Specifically, we describe the operational characteristics of the underlying supply chain system considered in each paper, highlight the features of the network design model proposed therein, and discuss the proposed solution approach along with a brief description of significant computational work, if available. In conclusion, a critical review of the published literature is given and potential areas for future research are identified. © 2008 Wiley Periodicals, Inc. NETWORKS, 2009

Online sales channel together with traditional channel form a dual-channel supply chain. Using game theory, this paper studied the coordination of a dual-channel closed loop supply chain under stochastic demand, with the retailer as the dominator/leader and the manufacturer responsible for product recycling. After comparing the optimal profit levels of the supply chain under decentralized and centralized decision systems, it finds that the total profit of the supply chain under decentralized decision is sub-optimal due to channel conflict caused by double marginal effects. In order to realize optimization of the supply chain’s total profit, this research proposed a dual-channel closed loop supply chain mechanism based on a modified two-part pricing contact. Finally, it used a numerical simulation to test the validity of the proposed contract and illustrate contract parameters’ effects on corporate profits.

With the continuous development of internet technology and increasing awareness of environmental protection among consumers, the dual-channel closed-loop supply chain management combining online direct sales channel and retail channel has received more and more attention, however, the existing research has neglected the service research, so this paper focuses on the service strategy in the dual-channel closed-loop supply chain. In this paper, we propose three service strategy models for dual-channel closed-loop supply chains, including when there is no service provision, after-sales service and recycling service provided by retailers and after-sales service provided by manufacturers and recycling service provided by retailers, compare and analyze the optimal decisions of supply chain members under the three service strategy models, discuss the role of service generated in dual-channel closed-loop supply chains, and propose a service cost-sharing strategy to achieve a Pareto improvement in the effectiveness of a dual-channel closed-loop supply chain. The study finds that service plays a positive role in the dual-channel closed-loop supply chain; the model of manufacturer providing after-sales service and retailer providing recycling service is the best service strategy choice in terms of economic and social benefits; the service cooperation mechanism of service cost sharing can achieve Pareto improvement of the supply chain within a reasonable range.

The revenue and cost sharing contract of pricing and servicing policies in a dual-channel closed-loop supply chain

This study establishs a dual channel closed-loop supply chain (CLSC) model under a government–penalty mechanism (RPM) consisting a dual-channel manufacturer, a retailer, and the government. We consider a Stackelberg game between the manufacturer and the retailer, and the government rewards or punishes manufacturers on the basis of the collection rate of used products. This paper analyzes the influence of government RPM on the optimal decisions, the relationship between the two sales channels, and the total social welfare of the supply chain system. We find that the government RPM can improve the stability of the dual-channel supply chain and the collection rate of the used products. Moreover, we are the first to provide a method of deriving the optimal government RPM through a numerical example.

Research on low-carbon strategies in supply chain with environmental regulations based on differential game

Products returned by the customer are common in the retail industry. Nowadays, many retailers implement customer product return policy to handle customer’s dissatisfaction. Buyback policy by the manufacturer is also common to deal with the customer return policy. Customer product return policy will attract the customer to purchase more products to the retailer; and buyback policy will encourage the retailer to order more products to the manufacturer. In the presence of both policies in the supply chain, the manufacturer and the retailer have to determine the optimal decision to achieve maximize profit. Therefore, this research discusses about optimal decision making in single period supply chain problem with the objective of profit maximization that consists of the retailer who sells the product to the customer and implementing the full refund customer product return policy; and the manufacturer who supplies the product to the retailer and implementing the buyback policy for the returned product and unsold inventory. The retailer will determine the retail price and order quantity given the wholesale price and buyback price, and the manufacturer will determine the wholesale price and buyback price given the retailer’s optimal decision The mathematical model for the cost, revenue, and profit of the retailer and the manufacturer are constructed here, and then the optimal decisions are determined based on these equations. The optimal decision making of both parties are then proved by the numerical examples given some number of parameters. The numerical experiments sensitivity analysis for the change in unit profit, base demand, price sensitivity, and return rate are also constructed to analyze the responds of both parties in the change of some parameters. By this research, we can observe the impact of changing in unit profit, base demand, price sensitivity, and return rate on the retailer’s and the manufacturer’s profit; and also their respond of optimal decision facing these changes. Lower unit profit, lower base demand, high sensitivity of price and high return rate will have negative impact for the retailer and the manufacturer.

Under uncertain circumstances, adopting an option contract within a dual-channel approach emerges as a beneficial strategy for maximising individual profit among the supply chain members. This viewpoint led us to design and examine a dual-channel closed-loop supply chain involving a manufacturer and a retailer. By considering the customer demand is probabilistic and depends on both the product's green innovation level and the retailer-provided sales effort level, we explore three distinct strategies, namely centralised, manufacturer Stackelberg and option contracts, to determine the optimal profits for individual members and the entire supply chain. We present a numerical example illustrating the analytical results to help comprehend the conclusions better. The primary outcome of our study is that when supply chain participants employ option contract techniques and use fixed values for the option price and exercise price, the supply chain as a whole and each supply chain member experience the most favourable outcomes. Additionally, we perform a sensitivity analysis, revealing that the overall supply chain profit positively correlates with the increasing collection rate of end-of-life products. The present study includes insightful information on effectively operating a dual-channel closed-loop supply chain, highlighting the benefits of using option contract strategies.

With the rapid development of green consumption demand, more and more consumers choose to purchase green products. Incorporating consumers' environmental awareness into a green supply chain, this paper studies the decisions and coordination of the green supply chain under the retailer's reciprocal preference. The decentralized models with and without reciprocity are constructed and analyzed with consideration of product green degree and pricing. Then, the cost-sharing joint commission contract is proposed to realize Pareto improvement. Finally, propositions and conclusions are verified by numerical simulation. The results indicate that improving consumers' environmental awareness is favorable to the profit of the whole supply chain and environment. Besides, within the reasonable range of retailer's reciprocal preference, higher value of the retailer's reciprocal preference is conductive to the better realization of environmental protection and the improvement of the economic welfare of the whole society. The cost-sharing contract exerts a positive effect in improving the environmental and economic performance in the green supply chain (GSC). The paper provides a theoretical foundation for the design of cooperative contracts in the GSC, especially the GSC with retailer's reciprocal preference.

Level of quality not only affects demand but also affects the proportion of imperfect products and then affects profit. This paper takes the quality level as a decision variable, considers both the consumer demand and the recovery of imperfect products in a dual-channel closed-loop supply chain (CLSC), and studies the significance of a revenue-sharing contract for coordination. The results show that the relationship between the optimal price and the quality level is affected by the repair cost of imperfect products and that the consumer’s attention to price and quality affects the trend of the overall profit with the quality level. In some cases, simply improving the quality level cannot expand the demand and is not even conducive to the improvement of green supply chain profits. It is also found that in both centralized and decentralized scenarios, coordination contracts can effectively motivate retailers to collect waste and help improve the economic efficiency of green supply chains.

We focus on the impacts of technological spillovers and environmental awareness in a two-echelon supply chain with one-single supplier and one-single manufacturer to reduce carbon emission. In this supply chain, carbon abatement investment becomes one of key factors of cutting costs and improving profits, which is reducing production costs in the components and products—the investment from players in supply chain. On the basis of optimality theory, the centralized and decentralized models are respectively established to investigate the optimal decisions and profits. Further, setting the players’ profits of the decentralized scenario as the disagreement points, we propose a bargaining-coordination contract through revenue-cost sharing to enhance the performance. Finally, by theoretical comparison and numerical analysis, the results show that: (i) The optimal profits of players and supply chain improve as technological spillovers and environmental awareness increase, and the profits of them in the bargaining-coordination contract are higher than that in the decentralized scenario; (ii) Technological spillovers between the players amplify the impact of “free-ride” behavior, in which the supplier always incentives the manufacturer to improve carbon emission intensity, but the cooperation will achieves and the profits will improve only when technological spillovers and environmental awareness are great; (iii) The contract can effectively achieve coordinated supply chain, and improve carbon abatement investment.

The paper explores the pricing policies and green strategies in a duopoly green supply chain with vertical and horizontal competition, which includes a green manufacturer, a traditional manufacturer and a common retailer. The purpose of the paper is to address the following research problems: (1) How manufacturers’ market power influences the pricing policies and green strategies of supply chain members in a green supply chain? (2) What conditions do first-mover advantage and green competitive advantage be effective simultaneously? We establish the linear demand functions of the duopoly green supply chain and obtain the players’ optimal decisions under channel members’ different market power. Further, we conduct sensitivity analysis and numerical examples of players’ optimal decisions about consumer’s environmental awareness and greening cost effector. Based on the theoretical and numerical analysis, we find that green manufacturer would benefit from the increment of consumer’s environmental awareness but be depressed by the increase of greening cost, which is contrary to the traditional manufacturer. Additionally, correlations of retailer’ optimal decisions and profits between consumer’s environmental awareness and greening cost effector are related to the manufacturers’ market power structures. Furthermore, we find that the green competitive advantage is more effective than first-mover advantage while first-mover advantage does not always effective in the duopoly green supply chain. Specially, traditional manufacturer always prefers to be the follower competing with the green manufacturer, no matter with the variety of consumer’s environmental awareness and greening cost effector, while green manufacturer would like to be the leader only when the consumer’s environmental awareness is relatively high or the greening cost effector is relatively low.

PurposeSupply chain management is one of the most important areas for competitiveness and growth of industries. Small and medium enterprises (SMEs) in India and other developing countries face problems in coordinating their supply chain due to lack of resources and improper directions. The purpose of this paper is to develop a framework for improving the coordination in supply chain and development of an index for coordination.Design/methodology/approachThe interpretive structural modelling (ISM) approach has been employed to develop the structural relationship among different factors of coordination and responsiveness in supply chain to take strategic decisions. This framework is also used to evaluate coordination index for an organization. It has been further illustrated with the help of a case study.FindingsIn total, 32 enablers for coordination in a supply chain have been identified based on literature review. These are further grouped into six categories such as top management commitment, organizational factors, mutual understanding, flow of information, relationship and decision making and responsiveness. It is observed that all of these factors have strong mutual linkage and top management commitment is a major driver for improving the coordination among these factors.Research limitations/implicationsAs ISM methodology is based on experts' opinion, this framework needs further validation with empirical data and detailed case studies.Originality/valueThis paper has explored major factors for coordination in supply chain. It will be of great value for SMEs in developing their strategies for coordination in supply chain. The coordination index evaluated in this paper will also help them in benchmarking their performance in terms of different attributes of supply chain.

Carbon emissions reduction in supply chain is an effective method to reduce the greenhouse effect. The paper investigates the impacts of carbon trading price and consumers’ environmental awareness on carbon emissions in supply chain under the cap-and-trade system. Firstly, it analyzes the centralized decision structure and obtains the requirements to coordinate carbon emissions reduction and order quantity in supply chain. Secondly, it proposes the supply chain coordination mechanism with revenue-sharing contract based on quantity discount policy, and the requirements that the contract parameters need to satisfy are also given. Thirdly, assuming the market demand is affected by consumer’s environmental awareness in addition form, the paper proposes the methods to determine the optimal order quantity and the optimal level of carbon emissions through model optimization. Finally, it investigates the impacts of carbon trading price on carbon emissions in supply chain. The results show that clean manufacturer’s optimal per-unit carbon emissions increase as the carbon trading price increases, while nongreen manufacturer’s optimal per-unit carbon emissions decrease as the carbon trading price increases. For the middle emissions manufacturer, the optimal per-unit carbon emissions depend on the relationship between the carbon trading price and the carbon reduction coefficient.

Considering that the demand for fresh agricultural products is affected by product freshness and price, a two-level fresh agricultural product supply chain decision model consisting of a risk-neutral supplier and a risk-averse retailer is constructed. In order to increase consumer demand for fresh agricultural products, the supplier will make appropriate efforts to preserve the freshness of agricultural products. The optimal fresh-keeping effort level of the supplier and the optimal pricing decision of the retailer under the centralized decision-making and decentralized decision-making modes were studied, respectively; through the design of traditional cost-sharing contracts, traditional cost and revenue-sharing contracts, and cost-sharing and compensation strategies, the supplier was encouraged to improve their fresh-keeping effort. The research shows that the traditional cost-sharing contract and the traditional cost-benefit sharing contract cannot coordinate the supply chain. Under the strategy of cost sharing and compensation, when the amount of compensation meets certain conditions, the coordination of supply chain can be realized. Finally, the important parameters of the model are analyzed by numerical simulation.