Research on Decision-Making of Dual-Channel Closed-Loop Supply Chain Considering Consumer Preference and Two-Way Fairness Concern

Abstract

AbstractIn order to explore the influence of multiple behavioral factors on supply chain decision-making, this paper first constructs a three-level dual channel closed-loop supply chain composed of manufacturers, retailers, recyclers and consumers. Then, based on the game theory, the supply chain decision-making model is established and solved under four conditions: fairness neutral (FN), horizontal fairness concern (FH), vertical fairness concern (FV) two-way fairness concern (FH & FV). Finally, combined with numerical simulation, the influence of channel preference and multiple fairness concerns on the pricing and profit of each decision maker is analyzed and verified. The results show that: (1) In the case of FH&FV, the negative impact of FV on wholesale prices is greater than the positive impact of FH on it. (2) Recyclers’ fairness concerns are beneficial to themselves. (3) In the case of FH & FV, the change of sales price is closely related to consumer preference. (4) For the influence of consumer preference, retailers tend to absorb by themselves, but not affect other members of the supply chain. Different from previous studies, this article considers the single and mixed effects of multiple behavioral factors on decision-making and provides a more appropriate reference for enterprises.KeywordsClosed loop supply chainSupply chain managementFairness concernsChannel preferenceGame theory