Pricing and logistics service decisions in platform-led electronic closed-loop supply chain with remanufacturing

Abstract

With the continuous development of e-commerce, it has become normal for the manufacturer to sell products and to collect used products through e-commerce platforms (platform for short). We consider an electronic closed-loop supply chain (E-CLSC) where we composed a manufacturer with remanufacturing capability and a platform that can provide logistics services. The purpose of this paper is to address whether the manufacturer should directly collect used products from the consumer under the platform. Specifically, we have developed four game models, namely model N (no collection), model M (the manufacturer collects), model E (the platform collects), and model T (the third-party collects) and derived the optimal pricing decisions, logistics service level, and collection rate for E-CLSC members. We found that remanufacturing used products is condu-cive to increasing the profits of the manufacturer and the platform as well as to increasing the utility of the consumer. Under the same conditions, for the manufacturer, the platform, and the consumer, the optimal choice is that the manufacturer directly collects the used products from the consumer. If the manufacturer is unable to establish an effective collection channel, he should consider out-sourcing to a contractor and should consider the platform to be under the same conditions. Numer-ical examples are also given to verify the proposed results.