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Alliance or no alliance—Bargaining power in competing reverse supply chains

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  • Sheu, Jiuh-Biing
  • Gao, Xiao-Qin

Abstract

This work investigates how bargaining power affects negotiations between manufacturers and reverse logistics providers in reverse supply chains under government intervention using a novel three-stage reverse supply chain model for two scenarios, a reverse logistics provider alliance and no reverse logistics provider alliance. Utilizing the asymmetric Nash bargaining game, this work seeks equilibrium negotiation solutions. Analytical results indicate that the reverse logistics provider alliance increases the bargaining power of reverse logistics providers when negotiating with a manufacturer for a profitable recycled-component supply contract; however, manufacturer profits are often reduced. Particularly in the case of an recycled-component vender-dominated market, a reverse logistics alliance with extreme bargaining power may cause a counter-profit effect that results in the decreases of profits for all players involved, including buyers (i.e., manufacturers) and allied recycled-component venders (i.e., reverse logistics providers). Additional managerial insights are provided for discussion.

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  • Sheu, Jiuh-Biing & Gao, Xiao-Qin, 2014. "Alliance or no alliance—Bargaining power in competing reverse supply chains," European Journal of Operational Research, Elsevier, vol. 233(2), pages 313-325.
    • Handle: RePEc:eee:ejores:v:233:y:2014:i:2:p:313-325
    DOI: 10.1016/j.ejor.2013.09.021
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    19. De, Arijit & Ray, Ankita & Kundu, Tanmoy & Sheu, Jiuh-Biing, 2023. "Is it wise to compete or to collaborate? Remanufacturing business models under collective extended producer responsibility legislation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    20. Zhang, Yanzi & Berenguer, Gemma & Zhang, Zhi-Hai, 2024. "A subsidized reverse supply chain in the Chinese electronics industry," Omega, Elsevier, vol. 122(C).
    21. Matsui, Kenji, 2022. "Should a retailer bargain over a wholesale price with a manufacturer using a dual-channel supply chain?," European Journal of Operational Research, Elsevier, vol. 300(3), pages 1050-1066.
    22. De Giovanni, Pietro, 2018. "A joint maximization incentive in closed-loop supply chains with competing retailers: The case of spent-battery recycling," European Journal of Operational Research, Elsevier, vol. 268(1), pages 128-147.
    23. Jiekun Song & Xiaoping Ma & Rui Chen, 2021. "A Profit Distribution Model of Reverse Logistics Based on Fuzzy DEA Efficiency—Modified Shapley Value," Sustainability, MDPI, vol. 13(13), pages 1-20, June.
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