The operation decisions of trade-in program in platform-based closed-loop supply chain under different sales modes

Recycling platforms have combined with online sales channels to form the platform-based closed-loop supply chain (PB-CLSC), which realizes the combination of product sales and used product recycling through the trade-in program. This paper constructs decision-making models of trade-in program under different sales modes and comparatively analyzes the operation decisions. It is shown that the pricing decisions under the resale mode are the most unstable and may be the largest when the production cost is small. The direct mode has the lowest pricing and the largest demand for new products and recycling quantity of used products, but the demand for refurbished products is the lowest, making the refurbishment rate the lowest. The commission price markup mechanism of the agency mode leads to predatory pricing, which makes the pricing decisions the highest of the three sales modes when the production cost is large. While the direct sales mode can maximize the manufacturer’s profit and, under certain circumstances, also enhance the profitability of recycling platform, it suffers from the lowest refurbishment rate, which is not conducive to the circular economy. The pursuit of profit maximization by PB-CLSC firms often hinders them from achieving Pareto optimality, a balance between profit and environmental protection is imperative for stability. Notably, under specific conditions, the resale mode or the agency mode can foster the sustainability of PB-CLSC.