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Alliance or no alliance—Bargaining power in competing reverse supply chains

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  • Sheu, Jiuh-Biing
  • Gao, Xiao-Qin

Abstract

This work investigates how bargaining power affects negotiations between manufacturers and reverse logistics providers in reverse supply chains under government intervention using a novel three-stage reverse supply chain model for two scenarios, a reverse logistics provider alliance and no reverse logistics provider alliance. Utilizing the asymmetric Nash bargaining game, this work seeks equilibrium negotiation solutions. Analytical results indicate that the reverse logistics provider alliance increases the bargaining power of reverse logistics providers when negotiating with a manufacturer for a profitable recycled-component supply contract; however, manufacturer profits are often reduced. Particularly in the case of an recycled-component vender-dominated market, a reverse logistics alliance with extreme bargaining power may cause a counter-profit effect that results in the decreases of profits for all players involved, including buyers (i.e., manufacturers) and allied recycled-component venders (i.e., reverse logistics providers). Additional managerial insights are provided for discussion.

Suggested Citation

  • Sheu, Jiuh-Biing & Gao, Xiao-Qin, 2014. "Alliance or no alliance—Bargaining power in competing reverse supply chains," European Journal of Operational Research, Elsevier, vol. 233(2), pages 313-325.
  • Handle: RePEc:eee:ejores:v:233:y:2014:i:2:p:313-325
    DOI: 10.1016/j.ejor.2013.09.021
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    References listed on IDEAS

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    Cited by:

    1. Wu, Xiaole & Zhou, Yu, 2017. "The optimal reverse channel choice under supply chain competition," European Journal of Operational Research, Elsevier, vol. 259(1), pages 63-66.
    2. repec:eee:ejores:v:267:y:2018:i:3:p:1089-1101 is not listed on IDEAS
    3. repec:eee:proeco:v:200:y:2018:i:c:p:50-67 is not listed on IDEAS
    4. repec:eee:proeco:v:194:y:2017:i:c:p:73-87 is not listed on IDEAS
    5. repec:eee:ejores:v:268:y:2018:i:1:p:128-147 is not listed on IDEAS
    6. Xiao, Tiaojun & Choi, Tsan-Ming & Cheng, T.C.E., 2016. "Delivery leadtime and channel structure decisions for make-to-order duopoly under different game scenarios," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 87(C), pages 113-129.

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