Pricing and quality competition between two substitute products in a closed-loop supply chain

Abstract

AbstractManufacturers are investing in the production of remanufactured products using quality controls because consumers are becoming more concerned about the environment and product-consistency. From this perspective, we examined a closed-loop supply chain with price and product quality-dependent demand by considering two different quality substitute products with two manufacturers. To examine the impact of pricing competition and product quality levels on the profitability of the supply chain members and the whole supply chain by considering the return rate of end-of-used products as a manufacturer decision variable, we have formulated a centralised and three different decentralised game models under decision power management. We provide a numerical example and analyse a few sensitivity parameters to help the described mathematical models be better understood. The result reveals that the total supply chain is profitable when all the members cooperate. The supply chain members are individually profitable when their competitor leads the market. Also, we see that the supply chain profit rises as product quality and substitutivity levels do.Keywords: Closed-loop supply chainsubstitute productsproduct quality levelremanufacturingStackelberg game AcknowledgementsThe authors would like to express their gratitude to the editors and referees for their valuable suggestions and corrections to enhance the clarity of the present article.Data availability statementThe authors confirm that the data supporting the findings of this study are available within the article.Disclosure statementNo potential conflict of interest was reported by the author(s).Additional informationFundingCorresponding author sincerely acknowledges the financial support given by the Council of Scientific & Industrial Research, Government of India under CSIR JRF/SRF Fellowship [file number 090025(12163)2021- EMR-I].Notes on contributorsBrojeswar PalBrojeswar Pal is an Assistant Professor in the Department of Mathematics, The University of Burdwan, West Bengal, India. He received his Ph.D. degree from the Jadavpur University, India. He has published several research papers in international journals of repute in the areas of production planning, inventory control and supply chain management.Subir GuinSubir Guin is currently working as a Junior Research Fellow at the Department of Mathematics, The University of Burdwan, India supported by Council of Scientific and Industrial Research (CSIR), New Delhi, after qualifying in the NET (National Eligibility Test). He received his B.Sc and M.Sc degree in Mathematics from the The University of Burdwan, India. He has published several papers in international journals of repute in the areas of supply chain management.Kripasindhu ChaudhuriKripasindhu Chaudhuri was a Senior Professor since 1983–2008 at the Department of Mathematics, Jadavpur University, India. He was also an UGC & AICTE emeritus fellow at Jadavpur University. He received his B.Sc degree in Mathematics, an M.Sc degree in Applied Mathematics, and a PhD in Fluid Mechanics at Visva-Bharati, Santiniketan, India. He was a visiting mathematician to International Centre for Theoretical Physics (ICTP), Trieste, Italy, in 1986, a fulbright scholar to the North Carolina State University, Raleigh, USA in 1989; fellow of the National Academy of Sciences (FNASc), India in 1996; fellow of the Institute of Mathematics and its Applications (FIMA), UK in 1999. He has so far guided 48 research scholars and has published 233 papers in international journals of repute in the areas of Fluid mechanics, solid mechanics, computer science, atmospheric science, operations research, mathematical ecology, history of mathematics, and marketing science.