Trade-in strategies in retail channel and dual-channel closed-loop supply chain with remanufacturing

Abstract

To derive conditions for manufacturer and retailer to implement trade-in policies voluntarily and identify the optimal channel format for trade-in, we construct traditional retail channel model and dual-channel model under two scenarios: without trade-in and with trade-in. We find that the retailer would implement trade-in policy voluntarily in traditional retail channel only if old customers’ market share exceeds a certain threshold. Interestingly, the result is opposite in dual-channel case. The traditional retail channel and the dual-channel could be the optimal choice for implementing trade-in respectively, depending on different value ranges of customers’ acceptance of direct online channel.