The revenue and cost sharing contract of pricing and servicing policies in a dual-channel closed-loop supply chain

Abstract

In a dual-channel closed-loop supply chain (CLSC), the products are sold online and offline in the forward channel, while the retailer provides reverse-channel service to recycle used products for remanufacturing in the offline channel. The problem of forward channel conflicts and improving the quality of reverse-channel recycling products have become important issues that need to be addressed urgently. Therefore, we combine the revenue-sharing contract in the forward channel with the channel investment cost-sharing contract, and introduce the Stackelberg game to investigate the contract coordination mechanism. Furthermore, we try to mitigate the problem of poor-quality recycling due to information asymmetry in the recycling channel by grading collection. The results show that the proposed contract can increase the profits of supply chain members in both the online and the offline channel by properly setting the revenue-sharing ratio and cost-sharing ratio. In addition, the revenue-sharing–cost-sharing mechanism in the dual-channel CLSC can increase the retailer's efforts regarding servicing and recycling. Finally, the strategy of grading collection promotes the efficiency of recycling.