Abstract
In this study, the presence of a powerful retailer in the dynamic collecting closed-loop supply chain is considered. The supply chain consists of a manufacturer and a retailer who is responsible for the used-product collection. Specifically, we have considered three settings, that is, no channel leader, the manufacturer as the leader and the retailer as the leader. The steady equilibrium and the optimal control strategies are derived in different channel power structures utilizing the open-loop control strategy method. By the comparison of three models, we found that the system with manufacturer leading results in the lowest return rate in the three models. If the transfer price of the used-product is low, the presence of a power retailer would result in a higher return rate, which is beneficial for decreasing the market price for the consumers. When the transfer price is quite high, the scenario with no channel leader in the supply chain would result in a higher return rate. However, the numerical comparison results of the profit rate of the supply chain members indicate that both manufacturer and retailer prefer themselves to be the channel leader rather than the other channel member as the leader. This means that although the presence of a power retailer is beneficial for the collecting efficiency, it is not enough to increase the profit of the supply chain members. The manufacturer should transfer all unit cost savings to the retailer in the scenario of manufacturer leading and no one leading.
Highlights
The closed-loop supply chain has drawn increasing attention from academic, as it can significantly reduce the firm’s production cost as well as reduce the pressure on the environment
We considered the presence of the power retailer on the dynamic collecting problem in a closed-loop supply chain, which consists of a manufacturer and a retailer who is responsible for the used-product collecting
For a closed-loop supply chain, the key procedure is the collection of the used-product which are to be used for the production of new products
Summary
The closed-loop supply chain has drawn increasing attention from academic, as it can significantly reduce the firm’s production cost as well as reduce the pressure on the environment. Bhattacharya et al [12] investigated the used-products price optimization problem in a closed-loop supply chain system These studies are mainly focused on the reverse channel design problem in different scenarios but have ignored the dynamic characteristics of the used-product collecting process. Huang et al [19] developed the dynamic model and proposed a stochastic differential game model to investigate the uncertainty factors which impact the collection strategy of a remanufacturing closed-loop supply chain [20] These studies mainly considered the optimal control strategy problem in the supply chain where the manufacturer leads the channel. Utilizing the dynamic collection model, this paper considered three different channel power structures to further study the optimal closed-loop supply channel collecting strategy, i.e., no channel leader, the manufacturer as the leader, the retailer as the leader.
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