Pricing Decisions of a Dual-Channel Closed-Loop Supply Chain under Uncertain Demand of Indirect Channel

Abstract

The dual-channel closed-loop supply chain (CLSC) which is composed of one manufacturer and one retailer under uncertain demand of an indirect channel is constructed. In this paper, we establish three pricing models under decentralized decision making, namely, the Nash game between the manufacturer and the retailer, the manufacturer-Stackelberg game, and the retailer-Stackelberg game, to investigate pricing decisions of the CLSC in which the manufacturer uses the direct channel and indirect channel to sell products and entrusts the retailer to collect the used products. We numerically analyze the impact of customer acceptance of the direct channel (θ) on pricing decisions and excepted profits of the CLSC. The results show that when the variableθchanges in a certain range, the wholesale price, retail price, and expected profits of the retailer all decrease whenθincreases, while the direct online sales price and manufacturer’s expected profits in the retailer-Stackelberg game all increase whenθincreases. However, the optimal recycling transfer price and optimal acquisition price of used product are unaffected byθ.

The Complexity Analysis in Dual‐Channel Supply Chain Based on Fairness Concern and Different Business Objectives

“…Liu and Xu [6] proved that dual-channel collaborative pricing enabled avoiding risk effectively. Gao et al [7] established three price models on dual-channel closed-loop supply chain; the results showed that when customer's acceptance with the Internet channel increases, the wholesale price and retail price would decrease, while the optimal recycling transfer price was not affected. Huang and Swaminathan [8] studied four prevalent pricing strategies which differed in the autonomy degree for 2 Complexity the Internet channel.…”

Analyzing the Structure of Closed-Loop Supply Chains: A Game Theory Perspective

“…Different CLSCs are studied under manufacturer-leader to investigate different topics such as the role of the players as marketing investor [118], recycling fund system [119], and the effect of risk [120]. However, some models compare the effect of two or three leaders (see, for instance, [14,58,[121][122][123][124][125] and [15,66,105,126,127] that consider triple and dual leaders, respectively). However, if the power difference between the parties is equal or minor, it can be studied through a Nash game.…”

Managing a Dual-Channel Supply Chain with Fairness and Channel Preference

“…e first related stream of the literature focuses on the online channel preference that includes Zhang et al [3], Guo et al [4], Zhu et al [5], Cai [11], Cao [12], Dumrongsiri et al [13], Dan et al [14], Gao et al [15], Hua et al [16], Huang and Swaminathan [17], Li et al [18], Lu and Liu [19], Ranjan and Jha [20], and Yoo and Lee [21]. For instance, Zhang et al [3] find that the channel selections are determined by the consumer's online acceptance.…”

“…Li et al [18] find that, with the high consumer's online acceptance, the manufacturer provides customized products under the decentralized and centralized supply chain structures. Gao et al [15] and Lu and Liu [19] investigate how the consumer's online acceptance affects the dual-channel excepted profits and obtain that the consumer's online acceptances positively affect the manufacturer's profit, while the retailer's gain is the opposite. Ranjan and Jha [20] think over the effect of retailers' risk attitude and demand uncertainty on the pricing mechanism among dual-channel members.…”