IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v17y2020i23p9143-d458230.html
   My bibliography  Save this article

Research on Pricing and Service Level Strategies of Dual Channel Reverse Supply Chain Considering Consumer Preference in Multi-Regional Situations

Author

Listed:
  • Yao Kang

    (School of Economics and Management, Xi’an University of Technology, Xi’an 710048, China)

  • Juhong Chen

    (School of Economics and Management, Xi’an University of Technology, Xi’an 710048, China)

  • Di Wu

    (School of Economics and Management, Xi’an University of Technology, Xi’an 710048, China)

Abstract

Facing the increasingly serious waste electrical and electronic equipment (WEEE) recycling problem, recycling enterprises actively introduce online recycling channels, build dual channel reverse supply chains (DRSC), and use high-level recycling price and service levels to enhance consumers’ recycling enthusiasm and recycling amount. Nevertheless, in China, where the imbalance of regional development is widespread, the recycling center, third-party recycler (TPR), and third-party platform (TPP) are faced with the choices of pricing and service level when facing multi-regional consumers. This paper mainly answers the following questions: (1) When the recycling center and TPP introduce online recycling channels in multi-regional situations, how should they set online recycling price, transfer price, and service level? (2) When consumer preference for online channels changes in a certain region, how should recycling enterprises adjust their optimal pricing and service level decisions for different regions to maximize their own profits? How do the profits of recycling enterprises change? In order to solve the above problems, in this paper, we propose three pricing and service level decision models for the recycling center with online channels, namely, keeping prices unchanged, unifying all prices, and maximizing its own profits. By using the Stackelberg game to solve the model, we get the optimal pricing, service level decisions, as well as the maximum profits of the recycling center, TPP, and TPR when consumer preference changes. By analyzing the results of the model, we find that the change of consumer preference for online channels in a certain region will affect the decision and profits of multi-regional recycling enterprises. Specifically, consumer preference for online channels in a certain region will not only lead to an increase in the profits of the recycling center and TPP and a decrease in the profit of local TPRs, but also an increase in the profit of TPRs in other regions. In addition, at the beginning of introducing online channels, the recycling center can adopt two strategies to avoid conflicts among channels: keeping offline transfer prices unchanged and unifying all transfer prices, but the former promotes its economic profits more significantly.

Suggested Citation

  • Yao Kang & Juhong Chen & Di Wu, 2020. "Research on Pricing and Service Level Strategies of Dual Channel Reverse Supply Chain Considering Consumer Preference in Multi-Regional Situations," IJERPH, MDPI, vol. 17(23), pages 1-21, December.
    • Handle: RePEc:gam:jijerp:v:17:y:2020:i:23:p:9143-:d:458230
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/17/23/9143/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1660-4601/17/23/9143/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Juhong Chen & Di Wu & Peng Li, 2018. "Research on the Pricing Model of the Dual-Channel Reverse Supply Chain Considering Logistics Costs and Consumers’ Awareness of Sustainability Based on Regional Differences," Sustainability, MDPI, vol. 10(7), pages 1-31, June.
    2. Yan, Ruiliang & Pei, Zhi, 2009. "Retail services and firm profit in a dual-channel market," Journal of Retailing and Consumer Services, Elsevier, vol. 16(4), pages 306-314.
    3. Feng, Lipan & Govindan, Kannan & Li, Chunfa, 2017. "Strategic planning: Design and coordination for dual-recycling channel reverse supply chain considering consumer behavior," European Journal of Operational Research, Elsevier, vol. 260(2), pages 601-612.
    4. Huang, Wei & Swaminathan, Jayashankar M., 2009. "Introduction of a second channel: Implications for pricing and profits," European Journal of Operational Research, Elsevier, vol. 194(1), pages 258-279, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jiaying Xu & Qingfeng Meng & Yuqing Chen & Jia Zhao, 2023. "Dual-Channel Pricing Decisions for Product Recycling in Green Supply Chain Operations: Considering the Impact of Consumer Loss Aversion," IJERPH, MDPI, vol. 20(3), pages 1-15, January.
    2. Ruguo Fan & Rongkai Chen, 2022. "Promotion Policies for Electric Vehicle Diffusion in China Considering Dynamic Consumer Preferences: A Network-Based Evolutionary Analysis," IJERPH, MDPI, vol. 19(9), pages 1-21, April.
    3. Xuelong Zhang & Yuxin Xu & Xiaofan Chen & Jiuying Liang, 2023. "Pricing Decision Models of Manufacturer-Led Dual-Channel Supply Chain with Free-Rider Problem," Sustainability, MDPI, vol. 15(5), pages 1-20, February.

    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. Huang, Yanting & Liang, Yuqing & Gong, Yeming & Yuan, Zhe, 2023. "Role of trust-building in online recycling platforms," International Journal of Production Economics, Elsevier, vol. 263(C).
    2. Juhong Chen & Di Wu & Peng Li, 2018. "Research on the Pricing Model of the Dual-Channel Reverse Supply Chain Considering Logistics Costs and Consumers’ Awareness of Sustainability Based on Regional Differences," Sustainability, MDPI, vol. 10(7), pages 1-31, June.
    3. Wang, Qiang & Wu, Jie & Zhao, Nenggui, 2022. "Optimal operational policies of a dual-channel supply chain considering return service," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 199(C), pages 414-437.
    4. Di Wu & Juhong Chen & Ruyu Yan & Ruijun Zhang, 2019. "Pricing Strategies in Dual-Channel Reverse Supply Chains Considering Fairness Concern," IJERPH, MDPI, vol. 16(9), pages 1-17, May.
    5. Yan, Yingchen & Zhao, Ruiqing & Liu, Zhibing, 2018. "Strategic introduction of the marketplace channel under spillovers from online to offline sales," European Journal of Operational Research, Elsevier, vol. 267(1), pages 65-77.
    6. Zhang, Yumeng & Hezarkhani, Behzad, 2021. "Competition in dual-channel supply chains: The manufacturers' channel selection," European Journal of Operational Research, Elsevier, vol. 291(1), pages 244-262.
    7. Asl-Najafi, Javad & Yaghoubi, Saeed & Zand, Fatemeh, 2021. "Dual-channel supply chain coordination considering targeted capacity allocation under uncertainty," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 187(C), pages 566-585.
    8. Haoxuan Zheng & Xingwei Li & Xiaowen Zhu & Yicheng Huang & Zhili Liu & Yuxin Liu & Jiaxin Liu & Xiangye Li & Yuejia Li & Chunhui Li, 2022. "Impact of Recycler Information Sharing on Supply Chain Performance of Construction and Demolition Waste Resource Utilization," IJERPH, MDPI, vol. 19(7), pages 1-22, March.
    9. Ding, Qing & Dong, Ciwei & Pan, Zhicong, 2016. "A hierarchical pricing decision process on a dual-channel problem with one manufacturer and one retailer," International Journal of Production Economics, Elsevier, vol. 175(C), pages 197-212.
    10. Modak, Nikunja Mohan & Kelle, Peter, 2019. "Managing a dual-channel supply chain under price and delivery-time dependent stochastic demand," European Journal of Operational Research, Elsevier, vol. 272(1), pages 147-161.
    11. Yong He & Hongfu Huang & Dong Li, 2020. "Inventory and pricing decisions for a dual-channel supply chain with deteriorating products," Operational Research, Springer, vol. 20(3), pages 1461-1503, September.
    12. Xu, Guangye & Dan, Bin & Zhang, Xumei & Liu, Can, 2014. "Coordinating a dual-channel supply chain with risk-averse under a two-way revenue sharing contract," International Journal of Production Economics, Elsevier, vol. 147(PA), pages 171-179.
    13. Peng Li & Di Wu, 2021. "A Multi-Echelon Network Design in a Dual-Channel Reverse Supply Chain Considering Consumer Preference," IJERPH, MDPI, vol. 18(9), pages 1-24, April.
    14. Jiaying Xu & Qingfeng Meng & Yuqing Chen & Jia Zhao, 2023. "Dual-Channel Pricing Decisions for Product Recycling in Green Supply Chain Operations: Considering the Impact of Consumer Loss Aversion," IJERPH, MDPI, vol. 20(3), pages 1-15, January.
    15. Zhou, Rui & Liao, Yi & Shen, Wenjing & Yang, Shilei, 2020. "Channel selection and fulfillment service contracts in the presence of asymmetric service information," International Journal of Production Economics, Elsevier, vol. 222(C).
    16. Matsui, Kenji, 2017. "When should a manufacturer set its direct price and wholesale price in dual-channel supply chains?," European Journal of Operational Research, Elsevier, vol. 258(2), pages 501-511.
    17. Kar, Sumi & Basu, Kajla & Sarkar, Biswajit, 2023. "Advertisement policy for dual-channel within emissions-controlled flexible production system," Journal of Retailing and Consumer Services, Elsevier, vol. 71(C).
    18. Matsui, Kenji, 2020. "Optimal bargaining timing of a wholesale price for a manufacturer with a retailer in a dual-channel supply chain," European Journal of Operational Research, Elsevier, vol. 287(1), pages 225-236.
    19. Ciwei Dong & Liu Yang & Chi To Ng, 2020. "Quantity Leadership for a Dual-Channel Supply Chain with Retail Service," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 37(02), pages 1-32, March.
    20. Tian, Yi & Ma, Junhai & Xie, Lei & Koivumäki, Timo & Seppänen, Veikko, 2020. "Coordination and control of multi-channel supply chain driven by consumers’ channel preference and sales effort," Chaos, Solitons & Fractals, Elsevier, vol. 132(C).

    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:gam:jijerp:v:17:y:2020:i:23:p:9143-:d:458230. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.