Refurbished products and supply chain incentives

The emergence of online retail platforms and new retail technologies have enabled retailers to sell refurbished products to different markets, which exposes manufacturers to new challenges to control refurbished product market. This study investigates the incentives of supply chain members for refurbished products in a dual-channel supply chain. We examine the conditions under which the retailer is willing to sell refurbished products and the impact of refurbished products on manufacturer's profits in three different cases, i.e., local market selling, across market selling, and dual market selling. Our results reveal that the manufacturer can effectively control the selling of refurbished products by a wholesale price contract when the retailer can only deliver refurbished products to her local market. However, when the retailer has the ability to deliver refurbished products into a cross-border market, supply chain members encounter different incentives for refurbished products.

Automated summary

This study investigates the incentives of supply chain members for refurbished products in a dual-channel supply chain, exploring the impact of selling refurbished products on manufacturer's profits in different market scenarios. Results show that effective control over refurbished product selling can be achieved through a wholesale price contract when the retailer's reach is limited to local markets, but incentives differ when crossing borders.