IDEAS home Printed from https://ideas.repec.org/a/spr/joinma/v28y2017i1d10.1007_s10845-014-0961-0.html
   My bibliography  Save this article

Research on closed loop supply chain with reference price effect

Author

Listed:
  • Jie Xu

    (Zhejiang University)

  • Nan Liu

    (Zhejiang University)

Abstract

This paper considers a closed loop supply chain with the manufacturer as the Stackelberg leader. The manufacturer faces three different reverse channels, i.e., (1) manufacturer-managed, (2) retailer-managed, or (3) third party-managed channels. The reference price affects the purchase decision of consumers. Based on game theory, we discuss the reference price effect on the performances across three decentralized reverse channels, and examine the impact of reference price parameter (i.e., reference price coefficient in this paper) on optimal strategies. We conclude that higher reference price coefficient results in lower manufacturer and retailer profits. However, the profit of the third party increases in the reference price coefficient. In addition, some meaningful insights can be derived by comparison without the reference price effect in our models. We found that the scenario without reference price effect is generally superior to that with reference price effect.

Suggested Citation

  • Jie Xu & Nan Liu, 2017. "Research on closed loop supply chain with reference price effect," Journal of Intelligent Manufacturing, Springer, vol. 28(1), pages 51-64, January.
    • Handle: RePEc:spr:joinma:v:28:y:2017:i:1:d:10.1007_s10845-014-0961-0
    DOI: 10.1007/s10845-014-0961-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10845-014-0961-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10845-014-0961-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zhang, Jie & Kevin Chiang, Wei–yu & Liang, Liang, 2014. "Strategic pricing with reference effects in a competitive supply chain," Omega, Elsevier, vol. 44(C), pages 126-135.
    2. Zhang, Juan & Gou, Qinglong & Liang, Liang & Huang, Zhimin, 2013. "Supply chain coordination through cooperative advertising with reference price effect," Omega, Elsevier, vol. 41(2), pages 345-353.
    3. Geraldo Ferrer & Jayashankar M. Swaminathan, 2006. "Managing New and Remanufactured Products," Management Science, INFORMS, vol. 52(1), pages 15-26, January.
    4. Ferrer, Geraldo & Swaminathan, Jayashankar M., 2010. "Managing new and differentiated remanufactured products," European Journal of Operational Research, Elsevier, vol. 203(2), pages 370-379, June.
    5. Ioana Popescu & Yaozhong Wu, 2007. "Dynamic Pricing Strategies with Reference Effects," Operations Research, INFORMS, vol. 55(3), pages 413-429, June.
    6. Huang, Min & Song, Min & Lee, Loo Hay & Ching, Wai Ki, 2013. "Analysis for strategy of closed-loop supply chain with dual recycling channel," International Journal of Production Economics, Elsevier, vol. 144(2), pages 510-520.
    7. V. Daniel R. Guide & Vaidyanathan Jayaraman & Rajesh Srivastava & W. C. Benton, 2000. "Supply-Chain Management for Recoverable Manufacturing Systems," Interfaces, INFORMS, vol. 30(3), pages 125-142, June.
    8. Atalay Atasu & Miklos Sarvary & Luk N. Van Wassenhove, 2008. "Remanufacturing as a Marketing Strategy," Management Science, INFORMS, vol. 54(10), pages 1731-1746, October.
    9. Qiang, Qiang & Ke, Ke & Anderson, Trisha & Dong, June, 2013. "The closed-loop supply chain network with competition, distribution channel investment, and uncertainties," Omega, Elsevier, vol. 41(2), pages 186-194.
    10. Benchekroun, Hassan & Martín-Herrán, Guiomar & Taboubi, Sihem, 2009. "Could myopic pricing be a strategic choice in marketing channels? A game theoretic analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 33(9), pages 1699-1718, September.
    11. Charles H. Fine & Evan L. Porteus, 1989. "Dynamic Process Improvement," Operations Research, INFORMS, vol. 37(4), pages 580-591, August.
    12. Fleischmann, Moritz & Bloemhof-Ruwaard, Jacqueline M. & Dekker, Rommert & van der Laan, Erwin & van Nunen, Jo A. E. E. & Van Wassenhove, Luk N., 1997. "Quantitative models for reverse logistics: A review," European Journal of Operational Research, Elsevier, vol. 103(1), pages 1-17, November.
    13. R. Canan Savaskan & Shantanu Bhattacharya & Luk N. Van Wassenhove, 2004. "Closed-Loop Supply Chain Models with Product Remanufacturing," Management Science, INFORMS, vol. 50(2), pages 239-252, February.
    14. Fleischmann, Mortiz & Krikke, Hans Ronald & Dekker, Rommert & Flapper, Simme Douwe P., 2000. "A characterisation of logistics networks for product recovery," Omega, Elsevier, vol. 28(6), pages 653-666, December.
    15. Inderfurth, K. & de Kok, A. G. & Flapper, S. D. P., 2001. "Product recovery in stochastic remanufacturing systems with multiple reuse options," European Journal of Operational Research, Elsevier, vol. 133(1), pages 130-152, August.
    16. Gadi Fibich & Arieh Gavious & Oded Lowengart, 2003. "Explicit Solutions of Optimization Models and Differential Games with Nonsmooth (Asymmetric) Reference-Price Effects," Operations Research, INFORMS, vol. 51(5), pages 721-734, October.
    17. Praveen K. Kopalle & Ambar G. Rao & João L. Assunção, 1996. "Asymmetric Reference Price Effects and Dynamic Pricing Policies," Marketing Science, INFORMS, vol. 15(1), pages 60-85.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hadi Sahebi & Shayan Ranjbar & Ashkan Teymouri, 2022. "Investigating different reverse channels in a closed-loop supply chain: a power perspective," Operational Research, Springer, vol. 22(3), pages 1939-1985, July.
    2. Xuemei Zhang & Jian Cao & Yang Zhao & Jiansha Lu, 2022. "Fairness Concern in Remanufacturing Supply Chain—A Comparative Analysis of Channel Members’ Fairness Preferences," Sustainability, MDPI, vol. 14(7), pages 1-23, March.
    3. Yande Gong & Mengze Chen & Yuliang Zhuang, 2019. "Decision-Making and Performance Analysis of Closed-Loop Supply Chain under Different Recycling Modes and Channel Power Structures," Sustainability, MDPI, vol. 11(22), pages 1-26, November.
    4. Luttiely Santos Oliveira & Ricardo Luiz Machado, 2021. "Application of optimization methods in the closed-loop supply chain: a literature review," Journal of Combinatorial Optimization, Springer, vol. 41(2), pages 357-400, February.
    5. Chirantan Mondal & Bibhas C. Giri & Sanjib Biswas, 2022. "Integrating Corporate Social Responsibility in a closed-loop supply chain under government subsidy and used products collection strategies," Flexible Services and Manufacturing Journal, Springer, vol. 34(1), pages 65-100, March.
    6. Min Huang & Pengxing Yi & TieLin Shi, 2017. "Triple Recycling Channel Strategies for Remanufacturing of Construction Machinery in a Retailer-Dominated Closed-Loop Supply Chain," Sustainability, MDPI, vol. 9(12), pages 1-19, December.
    7. Yixin Zhang & Xifu Wang, 2021. "Optimal pricing and sourcing strategies in the presence of supply uncertainty and competition," Journal of Intelligent Manufacturing, Springer, vol. 32(1), pages 61-76, January.
    8. Sadjady Naeeni, Hannan & Sabbaghi, Navid, 2022. "Sustainable supply chain network design: A case of the glass manufacturer in Asia," International Journal of Production Economics, Elsevier, vol. 248(C).
    9. Zhang, Jie & Chiang, Wei-yu Kevin, 2020. "Durable goods pricing with reference price effects," Omega, Elsevier, vol. 91(C).
    10. Ehsan Shekarian & Simme Douwe Flapper, 2021. "Analyzing the Structure of Closed-Loop Supply Chains: A Game Theory Perspective," Sustainability, MDPI, vol. 13(3), pages 1-32, January.
    11. Zhichao Zhang & Qing Zhang & Zhi Liu & Xiaoxue Zheng, 2018. "Static and Dynamic Pricing Strategies in a Closed-Loop Supply Chain with Reference Quality Effects," Sustainability, MDPI, vol. 10(1), pages 1-31, January.
    12. Lingyu Gao & Xiaoli Wang, 2019. "Healthcare Supply Chain Network Coordination Through Medical Insurance Strategies with Reference Price Effect," IJERPH, MDPI, vol. 16(18), pages 1-23, September.
    13. Xiaobao Zhu & Jing Shi & Fengjie Xie & Rouqi Song, 2020. "Pricing strategy and system performance in a cloud-based manufacturing system built on blockchain technology," Journal of Intelligent Manufacturing, Springer, vol. 31(8), pages 1985-2002, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ma, Peng & Gong, Yeming & Mirchandani, Prakash, 2020. "Trade-in for remanufactured products: Pricing with double reference effects," International Journal of Production Economics, Elsevier, vol. 230(C).
    2. Pokharel, Shaligram & Mutha, Akshay, 2009. "Perspectives in reverse logistics: A review," Resources, Conservation & Recycling, Elsevier, vol. 53(4), pages 175-182.
    3. Renzheng Xue & Fengbin Zhang & Feng Tian, 2018. "A System Dynamics Model to Evaluate Effects of Retailer-Led Recycling Based on Dual Chains Competition: A Case of e-Waste in China," Sustainability, MDPI, vol. 10(10), pages 1-18, September.
    4. Ying Wu & Youwei Li, 2022. "Competition or Authorization—Manufacturers’ Choice of Remanufacturing Strategies," Sustainability, MDPI, vol. 14(19), pages 1-29, October.
    5. De Giovanni, Pietro & Zaccour, Georges, 2014. "A two-period game of a closed-loop supply chain," European Journal of Operational Research, Elsevier, vol. 232(1), pages 22-40.
    6. Régis Chenavaz, 2017. "Dynamic quality policies with reference quality effects," Applied Economics, Taylor & Francis Journals, vol. 49(32), pages 3156-3162, July.
    7. Chenavaz, Régis, 2016. "Dynamic pricing with reference price dependence," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 10, pages 1-17.
    8. Yang, Lei & Hu, Yijuan & Huang, Lijuan, 2020. "Collecting mode selection in a remanufacturing supply chain under cap-and-trade regulation," European Journal of Operational Research, Elsevier, vol. 287(2), pages 480-496.
    9. Anton, Ramona & Chenavaz, Régis Y. & Paraschiv, Corina, 2023. "Dynamic pricing, reference price, and price-quality relationship," Journal of Economic Dynamics and Control, Elsevier, vol. 146(C).
    10. Lihao Lu & Qinglong Gou & Wansheng Tang & Jianxiong Zhang, 2016. "Joint pricing and advertising strategy with reference price effect," International Journal of Production Research, Taylor & Francis Journals, vol. 54(17), pages 5250-5270, September.
    11. Ze-Bin Wang & Yao-Yu Wang & Jian-Cai Wang, 2016. "Optimal distribution channel strategy for new and remanufactured products," Electronic Commerce Research, Springer, vol. 16(2), pages 269-295, June.
    12. Hong, Xianpei & Xu, Lei & Du, Peng & Wang, Wenjuan, 2015. "Joint advertising, pricing and collection decisions in a closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 167(C), pages 12-22.
    13. Zhang, Jie & Kevin Chiang, Wei–yu & Liang, Liang, 2014. "Strategic pricing with reference effects in a competitive supply chain," Omega, Elsevier, vol. 44(C), pages 126-135.
    14. Ehsan Shekarian & Simme Douwe Flapper, 2021. "Analyzing the Structure of Closed-Loop Supply Chains: A Game Theory Perspective," Sustainability, MDPI, vol. 13(3), pages 1-32, January.
    15. Kai Liu & Chunfa Li & Runde Gu, 2021. "Pricing and Logistics Service Decisions in Platform-Led Electronic Closed-Loop Supply Chain with Remanufacturing," Sustainability, MDPI, vol. 13(20), pages 1-28, October.
    16. Benrong Zheng & Chao Yang & Jun Yang & Min Zhang, 2017. "Dual-channel closed loop supply chains: forward channel competition, power structures and coordination," International Journal of Production Research, Taylor & Francis Journals, vol. 55(12), pages 3510-3527, June.
    17. Mitra, Subrata, 2016. "Models to explore remanufacturing as a competitive strategy under duopoly," Omega, Elsevier, vol. 59(PB), pages 215-227.
    18. Lin, Zhibing, 2016. "Price promotion with reference price effects in supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 85(C), pages 52-68.
    19. Zhang, Jie & Chiang, Wei-yu Kevin, 2020. "Durable goods pricing with reference price effects," Omega, Elsevier, vol. 91(C).
    20. Liu, Wenjie & Liu, Wei & Shen, Ningning & Xu, Zhitao & Xie, Naiming & Chen, Jian & Zhou, Huiyu, 2022. "Pricing and collection decisions of a closed-loop supply chain with fuzzy demand," International Journal of Production Economics, Elsevier, vol. 245(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:joinma:v:28:y:2017:i:1:d:10.1007_s10845-014-0961-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.