The Presence of a Powerful Retailer on Dynamic Collecting Closed-Loop Supply Chain From a Sustainable Innovation Perspective

Jackson Jinhong Mi, Zongsheng Huang, Kai Wang, Sang-Bing Tsai, Guodong Li and Jiangtao Wang
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Jackson Jinhong Mi: School of Economics and Management, Shanghai Maritime University, Shanghai 201306, China
Zongsheng Huang: School of Economics and Management, Shanghai Maritime University, Shanghai 201306, China
Kai Wang: College of Business Administration, Capital University of Economics and Business, Beijing 100070, China
Sang-Bing Tsai: College of Business Administration, Capital University of Economics and Business, Beijing 100070, China
Guodong Li: Economics and Management College, Civil Aviation University of China, Tianjin 300300, China
Jiangtao Wang: Zhongshan Institute, University of Electronic Science and Technology of China, Zhongshan 528402, China

Sustainability, 2018, vol. 10, issue 7, 1-17

Abstract: In this study, the presence of a powerful retailer in the dynamic collecting closed-loop supply chain is considered. The supply chain consists of a manufacturer and a retailer who is responsible for the used-product collection. Specifically, we have considered three settings, that is, no channel leader, the manufacturer as the leader and the retailer as the leader. The steady equilibrium and the optimal control strategies are derived in different channel power structures utilizing the open-loop control strategy method. By the comparison of three models, we found that the system with manufacturer leading results in the lowest return rate in the three models. If the transfer price of the used-product is low, the presence of a power retailer would result in a higher return rate, which is beneficial for decreasing the market price for the consumers. When the transfer price is quite high, the scenario with no channel leader in the supply chain would result in a higher return rate. However, the numerical comparison results of the profit rate of the supply chain members indicate that both manufacturer and retailer prefer themselves to be the channel leader rather than the other channel member as the leader. This means that although the presence of a power retailer is beneficial for the collecting efficiency, it is not enough to increase the profit of the supply chain members. The manufacturer should transfer all unit cost savings to the retailer in the scenario of manufacturer leading and no one leading.

Keywords: closed-loop supply chain; differential game; open-loop control strategy; retailer collecting; channel power structure; sustainability; sustainable innovation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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