Coordinating economic incentives, customer service and pricing decisions in a competitive closed-loop supply chain

Hosseini‐Motlagh, Seyyed‐Mahdi; Nouri-Harzvili, Mina; Johari, Maryam; Sarker, Bhaba R.

doi:10.1016/j.jclepro.2020.120241

Cited by 36 publications

(18 citation statements)

References 46 publications

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“… Taleizadeh et al (2019) used a discount offer on the returned products so as to entice customers to bring back their used products. Hosseini-Motlagh et al (2020c) introduced economic incentives, Sabbaghnia and Taleizadeh (2020) used collection investment, and Hosseini-Motlagh et al (2020a) employed acquisition price as incentives for customers to return more items. Besides, some papers suggest that the incentive policies could not only raise the return quantity of used products but also affect the market demand for new products.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Therefore, in such a case, not only the retailers’ profit is affected, but also the manufacturer’s performance is exacerbated. In the literature, various promotional offers, such as purchase price ( Bulmuş et al, 2014 ), reward-penalty ( Wang et al, 2017 ), discount offer ( Taleizadeh et al, 2019 ), economic incentives ( Hosseini-Motlagh et al, 2020c ), collection investment ( Sabbaghnia and Taleizadeh, 2020 ), and acquisition price ( Hosseini-Motlagh et al, 2020a ), have been proposed to augment the collection amount of used products, while CSR participation has not been studied in this regard. We contribute to this literature and investigate the case where two competitive retailers exert CSR as an incentive policy to raise the consumers’ willingness to return their plastic containers, which also affects the demand for new products.…”

Section: Introductionmentioning

confidence: 99%

“…Accordingly, these efforts determine both the raw material supply (derived from collected products) and the sales amount (demand) of the pharmaceutical manufacturer. As a result, the manufacturer’s performance depends also on the retailers’ decisions ( Hosseini-Motlagh et al, 2020c ). CSR participation of retailers causes competition between them and complicates the interactions within the chain.…”

Section: Introductionmentioning

confidence: 99%

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Collection disruption management and channel coordination in a socially concerned closed-loop supply chain: A game theory approach

Hosseini‐Motlagh

Nami

Farshadfar

2020

Journal of Cleaner Production

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Uncertainty in real-world situations disrupts operations, including the collection process in closed-loop supply chains (CLSCs). A collection disruption is more critical in the pharmaceutical sector since pharmaceutical leftovers contain chemicals that threaten the environment and human health. This paper revolves around the challenges of a real pharmaceutical case that implements circular economy principles through a closed-loop system design, takes sustainability issues into account, and seeks for effective management of collection disruption. The case includes a manufacturer, who invests in green research and development (R&D), and two retailers competing on corporate social responsibility (CSR) efforts to boost the collection amount and market demand. This competitive environment raises conflict of interests and complicates the interactions between members, which need to be neutralized by an appropriate coordination plan. This paper proposes an analytical scenario-based coordination model that resolves channel conflicts and pays dividends to the involving members through augmenting their social, economic, and environmental performance. We show that the coordination plan could be a practical policy to increase the system’s adaptability to disruption. Under the coordinated model, by increasing a retailer’s collection disruption, the other one invests more in CSR efforts to compensate for its competitor’s lower collection, preventing loss for the whole channel. We also demonstrate that the proposed model maintains the chain’s balance and prevents loss in case of a highly competitive CSR-based collection and boosts the collection amount, market demand, and the whole chain’s profitability simultaneously.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Collection disruption management and channel coordination in a socially concerned closed-loop supply chain: A game theory approach

Hosseini‐Motlagh

Nami

Farshadfar

2020

Journal of Cleaner Production

Self Cite

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“…Ebrahimi [9] analyzed a supply chain with a monopolistic manufacturer aiming to release a new substitutable green product in addition to the conventional nongreen product and determine the green quality level of the new product. Hosseini-Motlagh [30] studied a competitive closed-loop supply chain and proposed a new function for supply of used products based on the service competition between the dealers. End-of-life (EOL) items play a critical role in the success of remanufacturing systems.…”

Section: Literature Reviewmentioning

confidence: 99%

“…So, from the first-order conditions of equation (29), we can get the optimal order quantity and retail price to the retailer. Similarly, to the manufacturer's problem, i.e., the equation (30), if the Proposition 1 holds, then there also be a unique optimal wholesale price and warranty policy for the manufacturer.…”

Section: Warranty Cost Sharingmentioning

confidence: 99%

Game Theoretic Analysis of After-Sales Service in Two-Echelon Supply Chain with Warranty Sensitive Demand

Zhao

et al. 2020

Mathematical Problems in Engineering

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After-sales service contract is widely popular in business. Although both the cases of manufacturer offering warranty and retailer offering warranty are common in market, the differences between them have been few studied. In this paper, we build a two-echelon supply chain in which a manufacturer produces limit quality products and sells them to a retailer. To promote sales, the manufacturer or retailer offers a free-replacement warranty to the customers. Customer’s demand is affected by the warranty length. We investigate the game relationships between the supply chain members. We find that the warranty length negatively relates to the product quality in both the manufacturer offering warranty case and the retailer offering warranty case. When retailer’s profit margin is not low, the retailer offers a longer warranty than the manufacturer and vice versa. Profit of the supply chain is also analyzed along with a numerical study.

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Analyzing coordination strategy of circular supply chain in re‐commerce industry: A game theoretic approach

et al. 2022

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The circular economy seeks to reduce waste by reusing, refurbishing, and recycling used products. It increases the resource value of used goods. In this study, we proposed a circular business gap exploiter model in which a re-commerce company exploits residual value in product systems utilization. A game-theoretic approach is used to investigate the coordination problem of a two-echelon circular supply chain with e-commerce and re-commerce companies. In addition, we proposed a coordinated structure under the revenue sharing contract and the two-part tariff contract through Nash negotiation to address the coordination problems. We compared the centralized and decentralized model findings and observed that the decentralized model shows potential for improvement. We showed model's applicability through numerical examples and sensitivity analysis to indicate how parameters such as wholesale price and retail price affect channel decisions and member profits. The results show that a two-part tariff contract may efficiently coordinate the circular supply chain. The study shows that under a circular business model, two tactics may be applied. These are extending product value and extending resource value.

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Coordinating economic incentives, customer service and pricing decisions in a competitive closed-loop supply chain

Cited by 36 publications

References 46 publications

Collection disruption management and channel coordination in a socially concerned closed-loop supply chain: A game theory approach

Collection disruption management and channel coordination in a socially concerned closed-loop supply chain: A game theory approach

Game Theoretic Analysis of After-Sales Service in Two-Echelon Supply Chain with Warranty Sensitive Demand

Analyzing coordination strategy of circular supply chain in re‐commerce industry: A game theoretic approach

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