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Reverse logistics pricing strategy for a green supply chain: A view of customers' environmental awareness

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  • Chen, Daqiang
  • Ignatius, Joshua
  • Sun, Danzhi
  • Zhan, Shalei
  • Zhou, Chenyu
  • Marra, Marianna
  • Demirbag, Mehmet

Abstract

The effectiveness of a reverse logistics strategy is contingent upon the successful execution of activities related to materials and product reuse. Green supply chain (GSC) in reverse logistics aims to minimize byproducts from ending up in landfills. This paper considers a retailer responsible for recycling and a manufacturer responsible for remanufacturing. Customer environmental awareness (CEA) is operationalized as customer word-of-mouth effect. We form three game theoretic models for two different scenarios with different pricing strategies, i.e. a non-cooperative pricing scenario based on Stackelberg equilibrium and Nash equilibrium, and a joint pricing scenario within a cooperative game model. The paper suggests that stakeholders are better off making their pricing and manufacturing decision in cooperation.

Suggested Citation

  • Chen, Daqiang & Ignatius, Joshua & Sun, Danzhi & Zhan, Shalei & Zhou, Chenyu & Marra, Marianna & Demirbag, Mehmet, 2019. "Reverse logistics pricing strategy for a green supply chain: A view of customers' environmental awareness," International Journal of Production Economics, Elsevier, vol. 217(C), pages 197-210.
    • Handle: RePEc:eee:proeco:v:217:y:2019:i:c:p:197-210
    DOI: 10.1016/j.ijpe.2018.08.031
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    6. Meiling He & Tianhe Lin & Xiaohui Wu & Jianqiang Luo & Yongtao Peng, 2020. "A Systematic Literature Review of Reverse Logistics of End-of-Life Vehicles: Bibliometric Analysis and Research Trend," Energies, MDPI, vol. 13(21), pages 1-22, October.
    7. Lili Ding & Zhimeng Guo & Yuemei Xue, 2023. "Dump or recycle? Consumer's environmental awareness and express package disposal based on an evolutionary game model," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(7), pages 6963-6986, July.
    8. Zhen Li & Jia Zhao & Qingfeng Meng, 2022. "Dual-channel recycling e-waste pricing decision under the impact of recyclers’ loss aversion and consumers’ bargaining power," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(10), pages 11697-11720, October.
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    13. Long, Qingqi & Tao, Xiaoying & Chen, Yunting & Chen, Yingni & Xu, Le & Zhang, Shuzhu & Zhang, Jie, 2022. "Exploring combined effects of dominance structure, green sensitivity, and green preference on manufacturing closed-loop supply chains," International Journal of Production Economics, Elsevier, vol. 251(C).
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