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Coordination of circular supply chain for online recommerce platform in industry 4.0 environment: a game-theoretic approach

Author

Listed:
  • Dharmendra Kumar

    (Delhi Technological University)

  • Saurabh Agrawal

    (Delhi Technological University)

  • Rajesh Kumar Singh

    (Management Development Institute)

  • Raj Kumar Singh

    (Delhi Technological University)

Abstract

In today's customer-oriented sustainable business environment, Industry 4.0 technologies may improve supply chain coordination, although their applicability in recommerce circular supply chain has not been thoroughly explored. The mobile application-based refurbishment company acquires end-of-life/end-of-use items from customers, refurbishes them, and resell them to end-users using an online recommerce platform. This study investigates the effects of extending product life and resource value of end-of-life/end-of-use products on channel performance in the era of industry 4.0. The issue of channel conflicts, pricing of refurbished products, and improving the quality of refurbished items with a warranty has been addressed. A Stackelberg game model is created to find the best supply chain decisions. In addition, we build four alternative scenarios: centralized, decentralized, revenue-sharing, and two-part tariff contract models and compared results to decide which of the scenario is the best. To assess the influence of relevant parameters on decisions, we present a numerical illustration and sensitivity analysis. We analyzed that decentralized channel needs further improvements and can achieve a win–win situation, but not in perfect coordination with a revenue-sharing contract. Our results also showed two-part tariff contract as a perfect coordination scenario i.e., most effective contracting approach for implementing extended producer responsibility regulation in the circular economy.

Suggested Citation

  • Dharmendra Kumar & Saurabh Agrawal & Rajesh Kumar Singh & Raj Kumar Singh, 2023. "Coordination of circular supply chain for online recommerce platform in industry 4.0 environment: a game-theoretic approach," Operations Management Research, Springer, vol. 16(4), pages 2081-2103, December.
    • Handle: RePEc:spr:opmare:v:16:y:2023:i:4:d:10.1007_s12063-023-00384-x
    DOI: 10.1007/s12063-023-00384-x
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