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

This paper forms a closed-loop supply chain (CLSC) consisted 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 prefers the hybrid (manufacturer) recycling mode in the dual-channel CLSC when the competing intensity of recycling is relatively low (high).

Automated summary

This paper develops a closed-loop supply chain with a manufacturer and a retailer, which adopts either a retail channel or a dual-channel sales mode for product selling and a manufacturer, retailer, or hybrid recycling mode for used product collection. Six game theory models are formulated to determine the optimal pricing and recycling rate decisions based on different sales and recycling modes. The paper explores the strategies for selecting optimal sales and recycling modes through model comparisons and numerical analysis. The findings reveal that customers, the environment, and the manufacturer generally prefer the dual-channel sales mode. However, the retailer's preference for the dual-channel (retail channel) sales mode depends on the discount coefficient of demand. Additionally, customers, the environment, and the manufacturer favor the hybrid (retailer) recycling mode when the competition intensity for recycling is relatively low (high). However, the retailer's choice of recycling mode varies depending on the type of supply chain.