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Two-echelon pharmaceutical reverse supply chain coordination with customers incentives

Author

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  • Weraikat, Dua
  • Zanjani, Masoumeh Kazemi
  • Lehoux, Nadia

Abstract

In the pharmaceutical industry, leftover medications that have not been properly disposed not only damage the environment but also might turn into a peril to people׳s health if being redistributed illegally in undeveloped countries. In contrary, if they are returned to the pharmaceutical producer before their expiry dates, they can be sold at subsidized prices or donated in such countries. In this research, we explore the role of providing incentives to customers in order to facilitate leftover returns and improve the sustainability for a real pharmaceutical reverse supply chain (RSC). Moreover, this research investigates the effect of having a proper coordination method between a producer of medications and third-party logistics (3PL) companies, responsible for collecting unwanted medications from customer zones. Finally, a technique is also proposed to share the RSC׳s saving among the producer and the 3PL companies. The experimental results on a real case study indicate that introducing incentives to customers could decrease the amount of uncollected medications from 18% up to 6.5%. Furthermore, having a proper coordination with 3PL companies could guarantee a full medication recovery.

Suggested Citation

  • Weraikat, Dua & Zanjani, Masoumeh Kazemi & Lehoux, Nadia, 2016. "Two-echelon pharmaceutical reverse supply chain coordination with customers incentives," International Journal of Production Economics, Elsevier, vol. 176(C), pages 41-52.
    • Handle: RePEc:eee:proeco:v:176:y:2016:i:c:p:41-52
    DOI: 10.1016/j.ijpe.2016.03.003
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    2. Feroz Khan & Yousaf Ali, 2022. "Implementation of the circular supply chain management in the pharmaceutical industry," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(12), pages 13705-13731, December.
    3. Meina Hua & Huajun Tang & Ivan Ka Wai Lai, 2017. "Game Theoretic Analysis of Pricing and Cooperative Advertising in a Reverse Supply Chain for Unwanted Medications in Households," Sustainability, MDPI, vol. 9(10), pages 1-31, October.
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    5. Zahiri, Behzad & Zhuang, Jun & Mohammadi, Mehrdad, 2017. "Toward an integrated sustainable-resilient supply chain: A pharmaceutical case study," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 103(C), pages 109-142.
    6. Yu Xia & Jing Li & Zhongyang Zhang, 2023. "Effects of price cap regulation on pharmaceutical supply chain under the zero markup drug policy," Operational Research, Springer, vol. 23(4), pages 1-27, December.
    7. Shiva Zandkarimkhani & Hassan Mina & Mehdi Biuki & Kannan Govindan, 2020. "A chance constrained fuzzy goal programming approach for perishable pharmaceutical supply chain network design," Annals of Operations Research, Springer, vol. 295(1), pages 425-452, December.
    8. Hasan, Md Mahmudul & Faiz, Tasnim Ibn & Modestino, Alicia Sasser & Young, Gary J. & Noor-E-Alam, Md, 2023. "Optimizing return and secure disposal of prescription opioids to reduce the diversion to secondary users and black market," Socio-Economic Planning Sciences, Elsevier, vol. 86(C).
    9. Seyyed-Mahdi Hosseini-Motlagh & Mona Jazinaninejad & Nazanin Nami, 2023. "Recall management in pharmaceutical industry through supply chain coordination," Annals of Operations Research, Springer, vol. 324(1), pages 1183-1221, May.
    10. Hua, Meina & Lai, Ivan Ka Wai & Tang, Huajun, 2019. "Analysis of advertising and a points-exchange incentive in a reverse supply chain for unwanted medications in households based on Game Theory," International Journal of Production Economics, Elsevier, vol. 217(C), pages 259-268.
    11. Carlos Franco & Edgar Alfonso-Lizarazo, 2017. "A Structured Review of Quantitative Models of the Pharmaceutical Supply Chain," Complexity, Hindawi, vol. 2017, pages 1-13, December.
    12. Sung Wook Yoon & Suk Jae Jeong, 2016. "Implementing Coordinative Contracts between Manufacturer and Retailer in a Reverse Supply Chain," Sustainability, MDPI, vol. 8(9), pages 1-15, September.
    13. Zeng, Amy Z. & Hou, Jing, 2019. "Procurement and coordination under imperfect quality and uncertain demand in reverse mobile phone supply chain," International Journal of Production Economics, Elsevier, vol. 209(C), pages 346-359.
    14. Zeinab Sazvar & Mahsa Zokaee & Reza Tavakkoli-Moghaddam & Samira Al-sadat Salari & Sina Nayeri, 2022. "Designing a sustainable closed-loop pharmaceutical supply chain in a competitive market considering demand uncertainty, manufacturer’s brand and waste management," Annals of Operations Research, Springer, vol. 315(2), pages 2057-2088, August.
    15. Seyyed-Mahdi Hosseini-Motlagh & Mona Jazinaninejad & Nazanin Nami, 2022. "Coordinating a socially concerned reverse supply chain for pharmaceutical waste management considering government role," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(2), pages 1852-1877, February.
    16. Li, Xin & Lian, Zhaotong & Pang, Chuan, 2020. "Efficient coordination of supply contracts with demand learning and two production modes," International Journal of Production Economics, Elsevier, vol. 225(C).
    17. Hu, Shu & Dai, Ying & Ma, Zu-Jun & Ye, Yu-Sen, 2016. "Designing contracts for a reverse supply chain with strategic recycling behavior of consumers," International Journal of Production Economics, Elsevier, vol. 180(C), pages 16-24.

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