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Coordination mechanisms for a three‐stage reverse supply chain to increase profitable returns

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  • Amy Z. Zeng

Abstract

In this article, we consider a generic electronic product that can be remanufactured or recycled at the end of its life cycle to generate new profit. We first describe the product return process and then present a customer segmentation model to capture consumers' different behaviors with respect to product return so that the retailer can work more effectively to increase the return volume. In regard to the collaboration between the retailer and the manufacturer, we explore a revenue‐sharing coordination mechanism for achieving a win‐win outcome. The optimality and sensitivity of the critical parameters in four strategies are obtained and examined both theoretically and numerically, which generate insights on how to manage an efficient consumer‐retailer‐manufacturer reverse supply chain, as well as on the feasibility of simplifying such a three‐stage chain structure. © 2012 Wiley Periodicals, Inc. Naval Research Logistics, 2013

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  • Amy Z. Zeng, 2013. "Coordination mechanisms for a three‐stage reverse supply chain to increase profitable returns," Naval Research Logistics (NRL), John Wiley & Sons, vol. 60(1), pages 31-45, February.
    • Handle: RePEc:wly:navres:v:60:y:2013:i:1:p:31-45
    DOI: 10.1002/nav.21517
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    References listed on IDEAS

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    1. Atalay Atasu & Miklos Sarvary & Luk N. Van Wassenhove, 2008. "Remanufacturing as a Marketing Strategy," Management Science, INFORMS, vol. 54(10), pages 1731-1746, October.
    2. Geraldo Ferrer & Jayashankar M. Swaminathan, 2006. "Managing New and Remanufactured Products," Management Science, INFORMS, vol. 52(1), pages 15-26, January.
    3. Mark Ferguson & V. Daniel R. Guide , Jr. & Gilvan C. Souza, 2006. "Supply Chain Coordination for False Failure Returns," Manufacturing & Service Operations Management, INFORMS, vol. 8(4), pages 376-393, August.
    4. 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.
    5. Laurens G. Debo & L. Beril Toktay & Luk N. Van Wassenhove, 2005. "Market Segmentation and Product Technology Selection for Remanufacturable Products," Management Science, INFORMS, vol. 51(8), pages 1193-1205, August.
    6. Zikopoulos, Christos & Tagaras, George, 2007. "Impact of uncertainty in the quality of returns on the profitability of a single-period refurbishing operation," European Journal of Operational Research, Elsevier, vol. 182(1), pages 205-225, October.
    7. R. Canan Savaskan & Luk N. Van Wassenhove, 2006. "Reverse Channel Design: The Case of Competing Retailers," Management Science, INFORMS, vol. 52(1), pages 1-14, January.
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    Cited by:

    1. Michael S. Pangburn & Euthemia Stavrulaki, 2022. "From Used to New: Committing to Product Refresh Services," Sustainability, MDPI, vol. 14(8), pages 1-21, April.
    2. Bo Wang & Ning Wang, 2022. "Decision Models for a Dual-Recycling Channel Reverse Supply Chain with Consumer Strategic Behavior," Sustainability, MDPI, vol. 14(17), pages 1-18, August.
    3. Yadong Shu & Ying Dai & Zujun Ma, 2019. "Pricing Decisions in Closed-Loop Supply Chains with Peer-Induced Fairness Concerns," Sustainability, MDPI, vol. 11(18), pages 1-19, September.
    4. Liu, Hongda & Zhao, Haifeng & Li, Shiyuan, 2023. "Future social change of manufacturing and service industries: Service-oriented manufacturing under the integration of innovation-flows drive," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
    5. Zeng, Amy Z. & Hou, Jing, 2019. "Procurement and coordination under imperfect quality and uncertain demand in reverse mobile phone supply chain," International Journal of Production Economics, Elsevier, vol. 209(C), pages 346-359.
    6. Yong He & Xuan Zhao, 2016. "Contracts and coordination: Supply chains with uncertain demand and supply," Naval Research Logistics (NRL), John Wiley & Sons, vol. 63(4), pages 305-319, June.
    7. Suvadarshini, Pinakhi & Biswas, Indranil & Srivastava, Samir K., 2023. "Impact of reverse channel competition, individual rationality, and information asymmetry on multi-channel closed-loop supply chain design," International Journal of Production Economics, Elsevier, vol. 259(C).
    8. Michael Krapp & Johannes B. Kraus, 2019. "Coordination contracts for reverse supply chains: a state-of-the-art review," Journal of Business Economics, Springer, vol. 89(7), pages 747-792, September.

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