Abstract
With the prevalence of Internet technology, many recycling centers have developed a dual-channel reverse supply chain by introducing online recycling channels on the basis of offline third-party recyclers (TPR). In addition, great imbalanced development has been observed in different regions in China, as supported by the literature review. It is necessary to help companies in the supply chain to adjust their pricing strategies according to regional differences. This paper is aimed at answering the following two questions: (1) After introducing online channels, what strategies should the recycling center adopt to adjust online recycling prices and to readjust the transfer price of offline channels? (2) How do recycling centers and TPR in city A & B modify their pricing strategies in accordance with logistics costs or consumers’ awareness of sustainability changes in city B? To solve the above questions, models were made to study the pricing strategies of recycling centers and the TPR based on the Stackelberg game in a dual-channel reverse supply chain in two cities. The results indicate that recycling centers will benefit from the increase in consumers’ awareness of sustainability and the reduction in logistics costs of the online channel in city B; this is in contrast to the TPR in this city. We also find that the revenue of the TPR in city A will be affected when the above two factors in city B change. Its increase or decrease depends on the selection of pricing strategy by the recycling center.
Highlights
With the rapid development of science and technology, the speed of product updates has increased
We extend the options of the price models of both recycling centers and the third-party recyclers (TPR)
In the initial stage of the introduction of the online channel, when the recycling center selects S1, TPR2 can maximize the revenue in this strategy, and when the recycling center selects S3 with the increase of θ2, this is the best strategy for the TPR2, so the selection of S3 is more conducive to the stability of the system
Summary
With the rapid development of science and technology, the speed of product updates has increased In this context, the emissions of waste are gradually increasing, which seriously aggravates environmental problems such as resource shortage and environmental pollution. Many countries have enacted relevant laws and policies to require enterprises to take responsibility for the proper handling of waste products to strengthen sustainable development. As early as 1984, the OECD (Organization for Economic Co-operation and Development) developed EPR (extended producer responsibility) to ensure that products were guaranteed throughout their life cycle, in the abandonment phase. This policy has profoundly affected many countries such as the U.S, South Korea, and China, etc. According to the White paper on the 2016 WEEE of the recycling industry in China [6], 30.6 million TV sets, 21.85 million microcomputers, and 182.91 million mobile phones were scrapped in China alone in 2016, meaning that the recycling industry has an amazing market
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