Impacts of sales mode and recycling mode on a closed-loop supply chain

Abstract

This paper forms a closed-loop supply chain (CLSC) consisting of a manufacturer and a retailer, within which the retail channel or dual-channel sales mode is chosen for selling products while the manufacturer, retailer or hybrid recycling mode is chosen for collecting used products. Based on different sales modes and recycling modes, six-game theory models are formulated to derive the optimal pricing and recycling rate decisions. Through the model comparisons and the numerical analysis, we investigate the strategies for choosing the optimal sales mode and the optimal recycling mode. We find that the customers, the environment and the manufacturer always prefer the dual-channel sales mode. However, the retailer prefers the dual-channel (retail channel) sales mode when the discount coefficient of demand is relatively low (high). Moreover, the customers, the environment and the manufacturer prefer the hybrid (retailer) recycling mode when the competing intensity of recycling is relatively low (high). However, the retailer prefers the hybrid (retailer) recycling mode in the retail channel CLSC while preferring the hybrid (manufacturer) recycling mode in the dual-channel CLSC when the competing intensity of recycling is relatively low (high).