Remanufacturing and channel strategies in e-commerce closed-loop supply chain

Abstract

This paper studies the recycling and remanufacturing mode and sales channel issues in the closed-loop supply chain. Specifically, this study establishes an e-commerce closed-loop supply chain consisting of a manufacturer and an e-commerce platform, and divides the recycling model into recycling by the manufacturer or recycling by the platform. Considering two common sales models in e-commerce platforms: the resale model and agency model, combined with the recycling model, four different research scenarios are formed. We use backward induction to solve the Stackelberg game problem and explore the remanufacturing and channel strategies of the manufacturer and the e-commerce platform. The research results show that for the manufacturer, under the same recycling model, when consumers’ preference for remanufactured products and the sensitivity of recycling volume to recycling prices are low, he will prefer the resale model. Under the same sales model, the manufacturer always prefers the recycling model in which he is responsible for recycling. However, the choice of platform is contrary to that of the manufacturer. In the resale model, both the manufacturer and the platform will choose to recycle by themselves, which cannot achieve a win-win situation. Under the agency model, when consumers’ preference for remanufactured products is high and the sensitivity coefficient of recycling volume to recycling price is low, supply chain members can achieve a win-win situation, and the scope of the win-win situation decreases as the unit production cost of new products increases. In addition, rising consumer preference for remanufactured products will lead to lower consumer surplus.