Reverse logistics pricing strategy for a green supply chain: A view of customers' environmental awareness

Daqiang Chen, Joshua Ignatius, Danzhi Sun, Shalei Zhan, Chenyu Zhou, Marianna Marra and Mehmet Demirbag

International Journal of Production Economics, 2019, vol. 217, issue C, 197-210

Abstract: The effectiveness of a reverse logistics strategy is contingent upon the successful execution of activities related to materials and product reuse. Green supply chain (GSC) in reverse logistics aims to minimize byproducts from ending up in landfills. This paper considers a retailer responsible for recycling and a manufacturer responsible for remanufacturing. Customer environmental awareness (CEA) is operationalized as customer word-of-mouth effect. We form three game theoretic models for two different scenarios with different pricing strategies, i.e. a non-cooperative pricing scenario based on Stackelberg equilibrium and Nash equilibrium, and a joint pricing scenario within a cooperative game model. The paper suggests that stakeholders are better off making their pricing and manufacturing decision in cooperation.

Keywords: Green supply chain; Reverse logistics pricing strategy; Customer environmental awareness; Stackelberg equilibrium; Nash equilibrium; Cooperative game (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:217:y:2019:i:c:p:197-210

DOI: 10.1016/j.ijpe.2018.08.031

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