Tri-party reverse supply chain coordination with competitive product acquisition process

Abstract

A coordination model in a reverse supply chain (RSC) considering product acquisition management and competition of third-party collectors is developed. Motivated by a case study of plastic recycling, collectors not only compete on the return incentives paid to consumers but also control the quality level of returned products delivered to the remanufacturer. A tri-party two-part tariff mechanism is introduced to coordinate the links between competing collectors and the remanufacturer. We analyze the retail and acquisition prices, and the quality level decisions under decentralized, centralized, and coordination systems. The results demonstrate that the coordination model not only significantly enhances both the quantity and quality of items received by the remanufacturer but also provides a win-win-win situation for members.