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Incentive strategies for an optimal recovery program in a closed-loop supply chain

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  • De Giovanni, Pietro
  • Reddy, Puduru V.
  • Zaccour, Georges

Abstract

We consider a dynamic closed-loop supply chain made up of one manufacturer and one retailer, with both players investing in a product recovery program to increase the rate of return of previously purchased products. End-of use product returns have two impacts. First, they lead to a decrease in the production cost, as manufacturing with used parts is cheaper than using virgin materials. Second, returns boost sales through replacement items.

Suggested Citation

  • De Giovanni, Pietro & Reddy, Puduru V. & Zaccour, Georges, 2016. "Incentive strategies for an optimal recovery program in a closed-loop supply chain," European Journal of Operational Research, Elsevier, vol. 249(2), pages 605-617.
    • Handle: RePEc:eee:ejores:v:249:y:2016:i:2:p:605-617
    DOI: 10.1016/j.ejor.2015.09.021
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