Joint pricing of new and refurbished items: A comparison of closed-loop supply chain models

Seung Ho Yoo and Byung Cho Kim

International Journal of Production Economics, 2016, vol. 182, issue C, 132-143

Abstract: This study aims to provide a clear understanding of the interaction between forward and reverse processes in a closed-loop supply chain based on a comprehensive model, which determines the sales prices of new and refurbished items, incorporating the channel conflict issues between the first and second markets. A three-echelon supply chain consisting of a manufacturer, a seller, and a refurbisher is examined. Then, we introduce five models with different supply chain structures considering possible combinations of processes. The comparison among five models reveals that the supply chain structure can differentiate not only the sales prices of new and refurbished items but also the overall performances. Specifically, the manufacturer's integration of the selling process induces the lowest sales price of a new item, and the sales price of a refurbished item is highest when a third-party refurbisher handles the refurbished item. The first-market sales are maximized when the manufacturer directly sells the new item, while second-market sales are maximized when the seller deals with both new and refurbished items. The combination of supply chain processes also plays an important role in enhancing the profit of each supply chain player and overall supply chain.

Keywords: Closed-loop supply chain; Return; Refurbishment; Pricing; Supply chain structure (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0925527316301694
Full text for ScienceDirect subscribers only

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:eee:proeco:v:182:y:2016:i:c:p:132-143

DOI: 10.1016/j.ijpe.2016.07.017

Access Statistics for this article

International Journal of Production Economics is currently edited by Stefan Minner

More articles in International Journal of Production Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().