Pricing and collection rate decisions in a closed-loop supply chain considering consumers' environmental responsibility. (20th July 2020)

• Record Type: Journal Article
• Authors: Wen, Danping; Xiao, Tiaojun; Dastani, Mehdi
• Is Part Of: Journal of cleaner production. Volume 262(2020)
• Publication Date: 2020-07-20
• Subjects: Closed-loop supply chain management -- Pricing strategy -- Environmental responsibility -- Consumer behavior -- Game theory; Factory and trade waste -- Management -- Periodicals; Manufactures -- Environmental aspects -- Periodicals; Déchets industriels -- Gestion -- Périodiques; Usines -- Aspect de l'environnement -- Périodiques; 628.5
• DOI: 10.1016/j.jclepro.2020.121272
• Languages: English
• ISSNs: 0959-6526

Abstract

Abstract: With the increase of environmental protection awareness among consumers and related government legislation, collection rate of used products is becoming an important business decision. This paper develops game models to explore price and collection rate decisions in a closed-loop supply chain considering heterogenous consumers with environmental responsibility. This paper also investigates the retailer's pricing strategies: differentiated pricing and equal-pricing. The results indicate that when the proportion of green consumers or initial retail price is high, the collection rate under equal-pricing is higher than that under differentiated pricing, and equal-pricing strategy is a win-win strategy. Under differentiated pricing, the collection rate decreases rapidly, while the retail price of remanufactured product and the retailer's profit increase. The endogenization of the initial retail price of new products affects the pricing strategy, especially when the proportion of green consumers is low enough. Under the endogenous initial retail price and heterogenous consumers, equal-pricing is a win-win strategy if the mean of the acceptance degree of remanufactured products is low and its dispersion is high. To improve environmental performance, the acceptance degree and its central tendency should be raised. Highlights: Pricing and collection rate under consumers' environmental responsibility is studied. Effects of the endogenization of initial price on equilibrium outcome is explored. Retail price of remanufactured products can decrease with green consumers' share. Collection rate under equal-pricing is higher if the initial price is high. Equal-pricing can be an effective strategy for the retailer and the supply chain.