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Refurbished products and supply chain incentives

Author

Listed:
  • Zhixin Chen

    (University of Science and Technology of China)

  • Shijian Hong

    (Xiamen University)

  • Xiang Ji

    (University of Science and Technology of China)

  • Ruixia Shi

    (University of San Diego)

  • Jie Wu

    (University of Science and Technology of China)

Abstract

The emergence of online retail platforms and new retail technologies have enabled retailers to sell refurbished products to different markets, which exposes manufacturers to new challenges to control refurbished product market. This study investigates the incentives of supply chain members for refurbished products in a dual-channel supply chain. We examine the conditions under which the retailer is willing to sell refurbished products and the impact of refurbished products on manufacturer’s profits in three different cases, i.e., local market selling, across market selling, and dual market selling. Our results reveal that the manufacturer can effectively control the selling of refurbished products by a wholesale price contract when the retailer can only deliver refurbished products to her local market. However, when the retailer has the ability to deliver refurbished products into a cross-border market, supply chain members encounter different incentives for refurbished products.

Suggested Citation

  • Zhixin Chen & Shijian Hong & Xiang Ji & Ruixia Shi & Jie Wu, 2022. "Refurbished products and supply chain incentives," Annals of Operations Research, Springer, vol. 310(1), pages 27-47, March.
    • Handle: RePEc:spr:annopr:v:310:y:2022:i:1:d:10.1007_s10479-021-04016-0
    DOI: 10.1007/s10479-021-04016-0
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    2. Cao, Hanrui & Chen, Zhixin & Zhou, Zhixiang & Wu, Jie, 2023. "Agency or wholesale? Strategic analysis of the influence of distribution strategy on product line design with endogenous quality," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 687-701.

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