Dual recycling channel decision in retailer oriented closed-loop supply chain for construction machinery remanufacturing

This paper targets on the optimum strategies of the collection decision for a retailer oriented closed-loop supply chain with dual recycling channel in the construction machinery industry. In the forward channel of this system, the manufacturer produces the new products, the retailer is contracted to remanufacture the used ones, and then sells both the new ones and remanufactured ones to the customers. In the reverse channel, the retailer and the third party collector simultaneously collect the used products. Based on several valid assumptions, we propose a special closed-loop supply chain model with dual recycling channel within the framework of game theory, and explore how the remanufacturer should properly allocate the collection efforts to the retailer and the third party. Furthermore, we conduct performance analysis to investigate the optimal strategies for the supply chain members. Our research confirms that the remanufacturer can gain more used product returns and profits with dual recycling channel, and the optimal allocation of the collection efforts to the retailer and the third party is determined by the relationship of the reverse logistics cost coefficients. (C) 2016 Elsevier Ltd. All rights reserved.