Environmental collaboration in a closed-loop supply chain with a reverse revenue sharing contract

Pietro Giovanni ()

Annals of Operations Research, 2014, vol. 220, issue 1, 135-157

Abstract: We consider a closed-loop supply chain (CLSC) with a single manufacturer and a single retailer who invest in green advertising to build up the goodwill dynamic. The latter has a dual purpose. On one hand, it leads to higher sales and plays the traditional role of marketing tool. On the other hand, it increases the return rate, playing the role of an operational tool. The players evaluate the convenience of collaborating in a CLSC (collaborative remanufacturing) by pursuing both marketing and operational targets implementing a Reverse Revenue Sharing Contract (RRSC). Our findings suggest that green advertising should aim to increase customers’ knowledge and awareness about the return policy because collaboration is successful only when the returns’ residual value is large while the sharing parameter is not too high. Moreover, the inefficiencies that RRSC carries out limit substantially its adoption. A RRSC is payoff-Pareto-improving only in few cases. Finally, we highlight the limitations of previous research in supply chain contracting, which has disregarded the administrative costs of using a two-parameter contract; this lack of consideration leads to imprecise findings and managerial prescriptions. Copyright Springer Science+Business Media, LLC 2014

Keywords: Closed-loop supply chain; Differential game; Reverse Revenue Sharing Contract; Green advertising; Feedback equilibrium (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (50)

Downloads: (external link)
http://hdl.handle.net/10.1007/s10479-011-0912-5 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:220:y:2014:i:1:p:135-157:10.1007/s10479-011-0912-5

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-011-0912-5

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().