Abstract
Environmental and social responsibilities have led many manufacturers to used products recovery. Meanwhile, many manufacturers nowadays sell products via indirect retailer channels and direct Internet channels. This paper models a dual-channel closed-loop supply chain to improve the sustainability of products. We apply the two-stage optimization technique and the Nash game to examine the impacts of the retail services and the degree of customer loyalty to the retail channel on the pricing of players in a centralized and a decentralized dual-channel supply chain. Our results show that the retail services have a great impact on the manufacturer and the retailer’s pricing strategies. We also compare the differences of pricing strategies between a centralized and a decentralized dual-channel supply chain and suggest the optimal retail services and pricing decisions for the players in the supply chain.
Highlights
Due to environmental and social responsibilities, people realize that profits and profitability are not the only elements for companies
We use the following notations in this paper: cm is the unit manufacturing cost of new products, and cr is the unit remanufacturing cost of used products; w is the wholesale price of new/remanufactured products; pr is the retail price of products; pd is the direct sale price of products; Dr is the consumer demand from the retail channel; Dd is the consumer demand from the direct sale channel; a is the total demand in the market; s denotes the level of the retail services/the retail services cost; and denotes the degree of customer loyalty to the retail channel
The retail services and pricing strategy are very important for the coordination of the dual sale channel
Summary
Due to environmental and social responsibilities, people realize that profits and profitability are not the only elements for companies. Qiang et al [27] investigated a CLSC (closed-loop supply chain) network model, where the manufacturer collected recycled products in the direct channel They showed that neither manufactured products nor remanufactured products had a significant effect on the retailer and consumer if the two kinds of products were comparable in function and quality.
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