Coordinating a reverse supply chain with price and warranty dependent random demand under collection uncertainties

Y. Sarada () and S. Sangeetha ()
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Y. Sarada: College of Engineering Guindy, Anna University
S. Sangeetha: College of Engineering Guindy, Anna University

Operational Research, 2022, vol. 22, issue 4, No 31, 4119-4158

Abstract: Abstract The paper presents two game theoretic models of a Reverse Supply Chain (RSC) for retailing a single type of remanufactured product. The first model (Model I) examines a two-echelon RSC with one manufacturer and, one retailer and considers uncertainties with respect to demand, collection quantity and collection yield. The second model (Model II) studies a three-echelon RSC with one supplier, one manufacturer and, one retailer and considers random demand and collection yield with demand dependent on selling price and warranty period. The manufacturer offers warranty for the remanufactured products that are produced using returned items retrieved from customers. The objective of this study is to introduce warranty for remanufactured products in a stochastic regime. Both the models are dealt under centralized, decentralized and revenue sharing contract policies. The profits of the supply chain members get enhanced through coordination with the revenue sharing contract. The numerical results demonstrate that the warranty utilized summons higher prices for the items in the markets, and appropriately can boost the manufacturers’ profit, which is also theoretically verified through a special case. Also, sensitivity analysis is carried out for some of the important model parameters.

Keywords: Pro-rata warranty; Remanufacturing; Revenue sharing contract; Stochastic demand; Collection quantity; Random yield; 90B06 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s12351-021-00657-y

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