Competitive collection under channel inconvenience in closed-loop supply chain

• Published in: European journal of operational research Vol. 275; no. 1; pp. 155 - 166
• Main Authors: He, Qidong, Wang, Nengmin, Yang, Zhen, He, Zhengwen, Jiang, Bin
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 16-05-2019
• Subjects: Closed-loop supply chain coordination; Competitive collecting; Customer behaviour; Supply chain management; Customer behaviour; Supply chain management; Competitive collecting; Closed-loop supply chain coordination
• ISSN: 0377-2217; 1872-6860
• DOI: 10.1016/j.ejor.2018.11.034

•Competitive collection under inconvenience-perception reduces recovery efficiency.•Unlike authorization, contract mechanism achieves the optimal recovery efficiency.•Middle intuitive impression barely influences collection rate and price strategies.•Retailer will always join competitive collection, leading low recovery efficiency.
The remanufacturing of used products reduces the consumption of raw materials and environmental pollution. How to improve the recovery efficiency has been capturing a global interest in both academics and business. Focusing on a closed-loop supply chain with competitive collection, we investigate the recovery efficiency, as well as the customer behaviour, under the inconvenience-perception in collection. First, we analyse the recovery efficiency of a two-echelon decentralized model consisting of a manufacturer and a retailer and contrast its performance with a centralized model. Second, we propose two coordination mechanisms (contract and authorization mechanisms) to ameliorate the decentralized model. Finally, we examine the influence of the intuitive impression of customer on different collection channels through a numerical study. We find that the retailer will always join the collection competition, which does dent the cost vantage of remanufacturing, but the competition fails to enhance the recovery efficiency. The contract mechanism can achieve the optimal recovery efficiency, whereas the authorization mechanism cannot. In addition, the middle-range fluctuation of the customers’ intuitive impression has a very limited influence on both the collection rate and decision strategies, and the non-obvious prejudice will enhance the retailer's collection activities but reduce the manufacturers’ collections.