Abstract
Remanufacturing of returned products has been increasingly recognized in industries as an effective approach to face environmental responsibility, government regulations, and increased awareness of consumers. In this paper, we address a closed-loop supply chain (CLSC) in which the manufacturer produces the brand-new products, as well as the remanufactured goods while the retailer sells these products to customers. We consider several different scenarios: the manufacturer and the retailer adopt a steady-state price or a dynamic price with reference quality effects in a centralized case; either, neither or both the manufacturer and the retailer price dynamically with reference quality effects, respectively, in a decentralized model. We solve the problem with the retailer recycling the sold copies and deduce the optimal pricing strategies while the manufacturer in charge of recovering the used items in such a CLSC. The result shows that dynamic pricing strategies are much more profitable for the supply chain and its members when compared with pricing statically; the dynamic pricing strategies with time-varying quality characterized by reference quality are more suited to a long-term and cooperative closed-loop supply chain. Moreover, the optimal recycling fraction relies on the recovery cost coefficient and proves to be uniform despite adopting a dynamic price and quality in all distinct cases.
Highlights
As the global economy prospered and advanced technology widely used, so many diversified products move towards consumers like an unstoppable wave that the life of products becomes shorter and shorter, the speed of renewing goods gets faster and faster, which make the total amount and the growth ratio of the waste rise
In a closed-loop supply chain, the product system including brand-new products and remanufactured goods as well as the collection policy should be considered. Does this product system influence the optimal pricing strategy with dynamic quality characterized by reference quality? What is the best collection policy in such a pricing and quality strategy for a closed-loop supply chain? based on reference quality effect, we investigate dynamic quality and dynamic pricing strategies in a closed-loop supply chain
The main purpose of our work is to investigate different pricing strategies in the context of dynamic quality characterized by reference quality effects for such a closed-loop supply chain
Summary
As the global economy prospered and advanced technology widely used, so many diversified products move towards consumers like an unstoppable wave that the life of products becomes shorter and shorter, the speed of renewing goods gets faster and faster, which make the total amount and the growth ratio of the waste rise. To achieve an optimal recycling policy, this paper constructs a closed-loop supply chain with the retailer collecting the used products and tries to compare it with the case where the manufacture collects the sold items directly. Motivated by the above facts, we address a closed-loop supply chain where the manufacturer and the retailer adopt dynamic pricing strategies with reference quality effects. For the sake of comparing the effectiveness of the various distinct pricing strategies with dynamic quality characterized by reference quality, we attempt to solve the model in several scenarios: (1) The whole supply chain adopts static and dynamic pricing strategies in a centralized scenario respectively; and, (2) In a decentralized case, either, neither or both the manufacturer and the retailer price dynamically, respectively.
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