IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v276y2024ics0925527324002305.html
   My bibliography  Save this article

Sourcing from risky reverse channels: Insights on pricing and resilience strategies in sustainable supply chains

Author

Listed:
  • Rajabzadeh, Hamed
  • Rabiee, Meysam
  • Sarkis, Joseph

Abstract

This study examines the resilience and sustainability of supply chains amid global disruptions, with a particular focus on the essential role of reverse logistics. Through a game-theoretic approach, we explore manufacturer decisions to source from either reliable but expensive raw materials or cost-effective yet riskier recycled or recyclable materials from the reverse logistics channel. Our analysis outlines three primary sourcing strategies: sourcing exclusively from suppliers (SS), sourcing solely through retailer reverse channel (RS), and a balanced dual sourcing (DS) approach. Our findings reveal the economic viability that recycling outsourcing is influenced by market demand and disruption risks. Notably, in scenarios of constrained market potential, the cost advantage of using recycled materials from less reliable reverse logistics channels surpasses the risks associated with supply chain disruptions, suggesting a complex cost-benefit landscape amidst supply uncertainties. Moreover, the stability of suppliers emerges as a pivotal factor in strategic sourcing decisions, underscoring the need to consider both economic efficiencies and supply reliability. The study also evaluates the dynamic competition between manufacturers and retailers, shedding light on how strategic adjustments driven by sustainability and resilience goals can enhance profitability and sustainability. It was found that despite the threat of disruptions, manufacturers benefit more from engaging with risky reverse channels under specific conditions, underscoring the nuanced decision-making required in uncertain supply scenarios. This research advances sustainable supply chain management by highlighting strategic complexities and the need for understanding economic efficiencies and supply stability, offering insights for navigating disruptions and fostering resilient, sustainable supply chains.

Suggested Citation

  • Rajabzadeh, Hamed & Rabiee, Meysam & Sarkis, Joseph, 2024. "Sourcing from risky reverse channels: Insights on pricing and resilience strategies in sustainable supply chains," International Journal of Production Economics, Elsevier, vol. 276(C).
    • Handle: RePEc:eee:proeco:v:276:y:2024:i:c:s0925527324002305
    DOI: 10.1016/j.ijpe.2024.109373
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527324002305
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2024.109373?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Wilson, Matthew & Goffnett, Sean, 2022. "Reverse logistics: Understanding end-of-life product management," Business Horizons, Elsevier, vol. 65(5), pages 643-655.
    2. Azad, Nader & Hassini, Elkafi, 2019. "Recovery strategies from major supply disruptions in single and multiple sourcing networks," European Journal of Operational Research, Elsevier, vol. 275(2), pages 481-501.
    3. Yong Geng & Joseph Sarkis & Raimund Bleischwitz, 2019. "How to globalize the circular economy," Nature, Nature, vol. 565(7738), pages 153-155, January.
    4. Dmitry Ivanov, 2018. "Revealing interfaces of supply chain resilience and sustainability: a simulation study," International Journal of Production Research, Taylor & Francis Journals, vol. 56(10), pages 3507-3523, May.
    5. Fahimnia, Behnam & Jabbarzadeh, Armin, 2016. "Marrying supply chain sustainability and resilience: A match made in heaven," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 91(C), pages 306-324.
    6. Freeman, Nickolas & Mittenthal, John & Keskin, Burcu & Melouk, Sharif, 2018. "Sourcing strategies for a capacitated firm subject to supply and demand uncertainty," Omega, Elsevier, vol. 77(C), pages 127-142.
    7. Yanjun Wang & Yugang Yu, 2020. "Flexible strategies under supply disruption: the interplay between contingent sourcing and responsive pricing," International Journal of Production Research, Taylor & Francis Journals, vol. 58(16), pages 4829-4850, July.
    8. Armin Jabbarzadeh & Behnam Fahimnia & Fatemeh Sabouhi, 2018. "Resilient and sustainable supply chain design: sustainability analysis under disruption risks," International Journal of Production Research, Taylor & Francis Journals, vol. 56(17), pages 5945-5968, September.
    9. Jafar Namdar & Xueping Li & Rupy Sawhney & Ninad Pradhan, 2018. "Supply chain resilience for single and multiple sourcing in the presence of disruption risks," International Journal of Production Research, Taylor & Francis Journals, vol. 56(6), pages 2339-2360, March.
    10. Hadi Sahebi & Stefan Nickel & Jalal Ashayeri, 2015. "Joint venture formation and partner selection in upstream crude oil section: goal programming application," International Journal of Production Research, Taylor & Francis Journals, vol. 53(10), pages 3047-3061, May.
    11. Varun Gupta & Dmitry Ivanov, 2020. "Dual sourcing under supply disruption with risk-averse suppliers in the sharing economy," International Journal of Production Research, Taylor & Francis Journals, vol. 58(1), pages 291-307, January.
    12. Sathiya, V. & Nagalakshmi, K. & Jeevamalar, J. & Anand Babu, R. & Karthi, R. & Acevedo-Duque, Ángel & Lavanya, R. & Ramabalan, S., 2023. "Reshaping healthcare supply chain using chain-of-things technology and key lessons experienced from COVID-19 pandemic," Socio-Economic Planning Sciences, Elsevier, vol. 85(C).
    13. Cajal-Grossi, Julia & Del Prete, Davide & Macchiavello, Rocco, 2023. "Supply chain disruptions and sourcing strategies," International Journal of Industrial Organization, Elsevier, vol. 90(C).
    14. Fleischmann, Moritz & Bloemhof-Ruwaard, Jacqueline M. & Dekker, Rommert & van der Laan, Erwin & van Nunen, Jo A. E. E. & Van Wassenhove, Luk N., 1997. "Quantitative models for reverse logistics: A review," European Journal of Operational Research, Elsevier, vol. 103(1), pages 1-17, November.
    15. Marta Negri & Enrico Cagno & Claudia Colicchia & Joseph Sarkis, 2021. "Integrating sustainability and resilience in the supply chain: A systematic literature review and a research agenda," Business Strategy and the Environment, Wiley Blackwell, vol. 30(7), pages 2858-2886, November.
    16. R. Canan Savaskan & Shantanu Bhattacharya & Luk N. Van Wassenhove, 2004. "Closed-Loop Supply Chain Models with Product Remanufacturing," Management Science, INFORMS, vol. 50(2), pages 239-252, February.
    17. Jighyasu Gaur & Mehdi Amini & Arza Keshava Rao, 2020. "The impact of supply chain disruption on the closed-loop supply chain configuration profit: a study of sourcing policies," International Journal of Production Research, Taylor & Francis Journals, vol. 58(17), pages 5380-5400, September.
    18. Cassidey, Thomas B. & Freeman, Nickolas & Melouk, Sharif, 2022. "Leveraging concurrent sourcing for risk mitigation and pricing," Omega, Elsevier, vol. 113(C).
    19. Basu, Preetam & Avittathur, Balram, 2018. "Pricing and sourcing strategies for competing retailers in supply chains under disruption riskAuthor-Name: Kumar, Milan," European Journal of Operational Research, Elsevier, vol. 265(2), pages 533-543.
    20. Genovese, Andrea & Acquaye, Adolf A. & Figueroa, Alejandro & Koh, S.C. Lenny, 2017. "Sustainable supply chain management and the transition towards a circular economy: Evidence and some applications," Omega, Elsevier, vol. 66(PB), pages 344-357.
    21. Shanshan Li & Yong He & Stefan Minner, 2021. "Dynamic compensation and contingent sourcing strategies for supply disruption," International Journal of Production Research, Taylor & Francis Journals, vol. 59(5), pages 1511-1533, March.
    22. Gupta, Varun & Ivanov, Dmitry & Choi, Tsan-Ming, 2021. "Competitive pricing of substitute products under supply disruption," Omega, Elsevier, vol. 101(C).
    23. Song Xu & Xiaotong Zhang & Lipan Feng & Wenting Yang, 2020. "Disruption risks in supply chain management: a literature review based on bibliometric analysis," International Journal of Production Research, Taylor & Francis Journals, vol. 58(11), pages 3508-3526, June.
    24. K. Katsaliaki & P. Galetsi & S. Kumar, 2022. "Supply chain disruptions and resilience: a major review and future research agenda," Annals of Operations Research, Springer, vol. 319(1), pages 965-1002, December.
    25. Rajabzadeh, Hamed & Babazadeh, Reza, 2022. "A game-theoretic approach for power pricing in a resilient supply chain considering a dual channel biorefining structure and the hybrid power plant," Renewable Energy, Elsevier, vol. 198(C), pages 1082-1094.
    26. Zahiri, Behzad & Zhuang, Jun & Mohammadi, Mehrdad, 2017. "Toward an integrated sustainable-resilient supply chain: A pharmaceutical case study," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 103(C), pages 109-142.
    27. Gheibi, Shahryar & Fay, Scott, 2021. "The impact of supply disruption risk on a retailer’s pricing and procurement strategies in the presence of a substitute product," Journal of Retailing, Elsevier, vol. 97(3), pages 359-376.
    28. Luo, Sha & Ahiska, S. Sebnem & Fang, Shu-Cherng & King, Russell E. & Warsing, Donald P. & Wu, Shuohao, 2021. "An analysis of optimal ordering policies for a two-supplier system with disruption risk," Omega, Elsevier, vol. 105(C).
    29. Mota, Bruna & Gomes, Maria Isabel & Carvalho, Ana & Barbosa-Povoa, Ana Paula, 2018. "Sustainable supply chains: An integrated modeling approach under uncertainty," Omega, Elsevier, vol. 77(C), pages 32-57.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shoufeng Ji & Pengyun Zhao & Tingting Ji, 2023. "A Hybrid Optimization Method for Sustainable and Flexible Design of Supply–Production–Distribution Network in the Physical Internet," Sustainability, MDPI, vol. 15(7), pages 1-34, April.
    2. Aldrighetti, Riccardo & Battini, Daria & Ivanov, Dmitry & Zennaro, Ilenia, 2021. "Costs of resilience and disruptions in supply chain network design models: A review and future research directions," International Journal of Production Economics, Elsevier, vol. 235(C).
    3. Antonio Zavala-Alcívar & María-José Verdecho & Juan-José Alfaro-Saiz, 2020. "A Conceptual Framework to Manage Resilience and Increase Sustainability in the Supply Chain," Sustainability, MDPI, vol. 12(16), pages 1-38, August.
    4. El-Awady Attia & Ali Alarjani & Md. Sharif Uddin & Ahmed Farouk Kineber, 2023. "Determining the Stationary Enablers of Resilient and Sustainable Supply Chains," Sustainability, MDPI, vol. 15(4), pages 1-23, February.
    5. Khadija Echefaj & Abdelkabir Charkaoui & Anass Cherrafi & Dmitry Ivanov, 2024. "Design of resilient and viable sourcing strategies in intertwined circular supply networks," Annals of Operations Research, Springer, vol. 337(1), pages 459-498, June.
    6. Ana Carolina Silva & Catarina Moreira Marques & Jorge Pinho de Sousa, 2023. "A Simulation Approach for the Design of More Sustainable and Resilient Supply Chains in the Pharmaceutical Industry," Sustainability, MDPI, vol. 15(9), pages 1-23, April.
    7. Gupta, Varun & Ivanov, Dmitry & Choi, Tsan-Ming, 2021. "Competitive pricing of substitute products under supply disruption," Omega, Elsevier, vol. 101(C).
    8. Sun, Qi & Ma, Junyong & Lu, Qihui & Gao, Yaya & Xu, Weidong, 2024. "System dynamics analysis of Retailer's emergency strategies when facing irrational demand and supply disruption," International Journal of Production Economics, Elsevier, vol. 271(C).
    9. Nayeri, Sina & Sazvar, Zeinab & Heydari, Jafar, 2022. "A global-responsive supply chain considering sustainability and resiliency: Application in the medical devices industry," Socio-Economic Planning Sciences, Elsevier, vol. 82(PB).
    10. Marta Negri & Enrico Cagno & Claudia Colicchia & Joseph Sarkis, 2021. "Integrating sustainability and resilience in the supply chain: A systematic literature review and a research agenda," Business Strategy and the Environment, Wiley Blackwell, vol. 30(7), pages 2858-2886, November.
    11. Aghajani, Mojtaba & Ali Torabi, S. & Altay, Nezih, 2023. "Resilient relief supply planning using an integrated procurement-warehousing model under supply disruption," Omega, Elsevier, vol. 118(C).
    12. Gital, Yeşim & Bilgen, Bilge, 2024. "Resilient strategies for managing supply and facility disruptions in a biomass supply chain," Applied Energy, Elsevier, vol. 372(C).
    13. Emilia Vann Yaroson & Soumyadeb Chowdhury & Sachin Kumar Mangla & Prasanta Kumar Dey, 2024. "Unearthing the interplay between organisational resources, knowledge and industry 4.0 analytical decision support tools to achieve sustainability and supply chain wellbeing," Annals of Operations Research, Springer, vol. 342(2), pages 1321-1368, November.
    14. Maureen S. Golan & Laura H. Jernegan & Igor Linkov, 2020. "Trends and applications of resilience analytics in supply chain modeling: systematic literature review in the context of the COVID-19 pandemic," Environment Systems and Decisions, Springer, vol. 40(2), pages 222-243, June.
    15. Yanting Huang & Benrong Zheng & Zongjun Wang, 2023. "Supplier–remanufacturing and manufacturer–remanufacturing in a closed-loop supply chain with remanufacturing cost disruption," Annals of Operations Research, Springer, vol. 324(1), pages 61-92, May.
    16. Maria Ghufran & Khurram Iqbal Ahmad Khan & Fahim Ullah & Wesam Salah Alaloul & Muhammad Ali Musarat, 2022. "Key Enablers of Resilient and Sustainable Construction Supply Chains: A Systems Thinking Approach," Sustainability, MDPI, vol. 14(19), pages 1-19, September.
    17. Luis Francisco López-Castro & Elyn L. Solano-Charris, 2021. "Integrating Resilience and Sustainability Criteria in the Supply Chain Network Design. A Systematic Literature Review," Sustainability, MDPI, vol. 13(19), pages 1-26, September.
    18. Rajabzadeh, Hamed & Babazadeh, Reza, 2022. "A game-theoretic approach for power pricing in a resilient supply chain considering a dual channel biorefining structure and the hybrid power plant," Renewable Energy, Elsevier, vol. 198(C), pages 1082-1094.
    19. Shashi & Piera Centobelli & Roberto Cerchione & Myriam Ertz, 2020. "Managing supply chain resilience to pursue business and environmental strategies," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 1215-1246, March.
    20. Bhavya Sharma & Murari Lal Mittal & Gunjan Soni & Bharti Ramtiyal, 2023. "An Implementation Framework for Resiliency Assessment in a Supply Chain," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 24(4), pages 591-614, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:276:y:2024:i:c:s0925527324002305. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.