In dual-channel Closed-loop Supply Chain, Remanufactured Product Pricing Strategy based on the Heterogeneity of Consumers

Changjiu Liu

Abstract


This paper establishes a dual-channel closed-loop supply chain composed of a manufacturer, a retailer and an e-tailer. Based on the heterogeneity degree of consumers’ preferences for remanufactured products, we then built an independent pricing model for the first cycle and a joint pricing model for second cycle and studied the mutual restriction of the product prices of retailers and e-tailers and the influence of consumers’ preferences on manufacturer wholesale prices under the condition of market competition. In addition, we also studied consumers’ preferences for products in the second cycle of the supply chain members’ products to determine optimal pricing and profitability. The results show that the product prices of the retailer and e-tailer have restrictions and are promoted. Consumers' preferences for remanufactured products were positively correlated with supply chain members’ and manufacturers’ profit growth significantly more than with that of retailers and e-tailers. When consumer demand reaches a certain level, the total profits of retailers are higher due to participation in remanufacturing. We conclude with a numerical example analysis and management advice.


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