Dual-channel remanufacturing closed-loop supply chains under carbon footprint and collection competition

Due to economic and environmental advantages, transferring from linear systems into circular economies has been accelerated, especially in developed countries, which affects companies' relations. Among different tools and methodologies, the closed-loop supply chain (CLSC) model as an established approach has shown its efficiency in reflecting these relations regarding the consumers' behavior. Because of the complexity, limited studies have considered the effects of different factors simultaneously on different CLSC network designs. This is the first attempt to study the effects of carbon emission and remanufacturing simultaneously on a dual-channel in both forward and reverse logistics, while there is competition on collection. Accordingly, a novel format for the demand function is suggested and employed. The decisions regarding the optimal pricing and collection strategies of CLSCs were investigated, within which the manufacturer is responsible for the remanufacturing process and selling the remanufactured products directly to the customer through the online channel. In contrast, new products are sold via the traditional retailer channel, imposing relevant costs. We explore the effect of different dual-collection settings when there is competition between collector parties under three possible options (i.e., ManufacturerRetailer, Manufacturer-Third-party, and Retailer-Third-party). The considered demand for both new and remanufactured products addresses consumers who have different willingness to choose the remanufactured items and are sensitive to the produced products' carbon footprint. The behavior of the formulated CLSC models is studied by game theory regarding decision variables, and each player's profit is discussed through systematic comparison. We analytically show that considering all the effects, third-party entry is not in the manufacturer's interest. The findings show that consumers' willingness to choose remanufactured products is generally more influential on prices and profits than their sensitivity to the carbon footprint. (C) 2021 The Author(s). Published by Elsevier B.V. on behalf of Institution of Chemical Engineers.

Automated summary

The study examines the impacts of various factors in a closed-loop supply chain system with a dual-channel, introducing a new demand function format and considering the effects of different collection settings. Consumers' willingness to choose remanufactured products is found to have a more significant influence on prices and profits than their sensitivity to the carbon footprint.