IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i19p5407-d272140.html
   My bibliography  Save this article

Optimal Channel Choice of Firms with New and Remanufactured Products in the Contexts of E-Commerce and Carbon Tax Policy

Author

Listed:
  • Jiajia Cao

    (School of Management, Nanchang University, 999 Xuefu Avenue, Nanchang 330031, China)

  • Bing Xu

    (School of Management, Nanchang University, 999 Xuefu Avenue, Nanchang 330031, China)

  • Jia Wang

    (School of Tourism & Tourism Research Institute, Nanchang University, 999 Xuefu Avenue, Nanchang 330031, China)

Abstract

This paper is motivated by the dilemma faced by firms who sell new and remanufactured products offline that need to consider whether to enter e-commerce platforms considering that more and more consumers are shopping online on e-commerce platforms rather than shopping offline. Our paper aims to help firms with new and remanufactured products make a channel choice and determine product pricing strategies in the contexts of e-commerce and carbon tax policy. Our paper uses optimization theory, game theory, utility functions and profit-maximization models to investigate the optimal channel choice of whether a firm should enter an e-commerce platform; it also investigates the optimal prices of new and remanufactured products and referral fees in two cases—the firm does not enter the platform (N) and the firm enters the platform (Y). Some insights are presented as follows: We found that the firm should enter the platform if the annual service fee is relatively low, otherwise, the firm should not enter the platform. Interestingly, in the case of a firm with an offline store with relatively large operational costs or hassle costs, the firm is more reluctant to enter the platform. In the extension, we considered some consumers who only purchase offline products, and found that the firm considering these consumers is more likely to choose not to enter the platform. Moreover, we argue that the carbon tax policy has a positive effect on product prices but a negative effect on referral fees charged by the platform, and the choice of Y hurts the environment due to a relatively high total carbon emission.

Suggested Citation

  • Jiajia Cao & Bing Xu & Jia Wang, 2019. "Optimal Channel Choice of Firms with New and Remanufactured Products in the Contexts of E-Commerce and Carbon Tax Policy," Sustainability, MDPI, vol. 11(19), pages 1-12, September.
  • Handle: RePEc:gam:jsusta:v:11:y:2019:i:19:p:5407-:d:272140
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/19/5407/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2071-1050/11/19/5407/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Cao, Kaiying & Xu, Xiaoyan & Bian, Yiwen & Sun, Yanhong, 2019. "Optimal trade-in strategy of business-to-consumer platform with dual-format retailing model," Omega, Elsevier, vol. 82(C), pages 181-192.
    2. Yuelin Shen & Sean P. Willems & Yue Dai, 2019. "Channel Selection and Contracting in the Presence of a Retail Platform," Production and Operations Management, Production and Operations Management Society, vol. 28(5), pages 1173-1185, May.
    3. Cai, Gangshu (George), 2010. "Channel Selection and Coordination in Dual-Channel Supply Chains," Journal of Retailing, Elsevier, vol. 86(1), pages 22-36.
    4. Wei-yu Kevin Chiang & Dilip Chhajed & James D. Hess, 2003. "Direct Marketing, Indirect Profits: A Strategic Analysis of Dual-Channel Supply-Chain Design," Management Science, INFORMS, vol. 49(1), pages 1-20, January.
    5. Wang, Cuixia & Leng, Mingming & Liang, Liping, 2018. "Choosing an online retail channel for a manufacturer: Direct sales or consignment?," International Journal of Production Economics, Elsevier, vol. 195(C), pages 338-358.
    6. Yan, Wei & Xiong, Yu & Xiong, Zhongkai & Guo, Nian, 2015. "Bricks vs. clicks: Which is better for marketing remanufactured products?," European Journal of Operational Research, Elsevier, vol. 242(2), pages 434-444.
    7. Jia Wang & Xijia Huang, 2018. "The Optimal Carbon Reduction and Return Strategies under Carbon Tax Policy," Sustainability, MDPI, vol. 10(7), pages 1-14, July.
    8. Yenipazarli, Arda, 2016. "Managing new and remanufactured products to mitigate environmental damage under emissions regulation," European Journal of Operational Research, Elsevier, vol. 249(1), pages 117-130.
    9. Hong, Zhaofu & Wang, Hao & Yu, Yugang, 2018. "Green product pricing with non-green product reference," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 115(C), pages 1-15.
    10. Anne T. Coughlan, 1985. "Competition and Cooperation in Marketing Channel Choice: Theory and Application," Marketing Science, INFORMS, vol. 4(2), pages 110-129.
    11. 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.
    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. Junhai Wang, 2021. "Impact of mobile payment on e-commerce operations in different business scenarios under cloud computing environment," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 12(4), pages 776-789, August.
    2. Junbin Wang & Xuan Gao & Zhiguo Wang, 2021. "Sustainable Supply Chain Decisions under E-Commerce Platform Marketplace with Competition," Sustainability, MDPI, vol. 13(8), pages 1-23, April.
    3. Huixin Liu & Fang Liu & Feng Du, 2022. "Research on Platform Operation Strategy Considering Consumers’ Hassle Costs," Sustainability, MDPI, vol. 14(5), pages 1-17, 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. He, Qidong & Wang, Nengmin & Browning, Tyson R. & Jiang, Bin, 2022. "Competitive collection with convenience-perceived customers," European Journal of Operational Research, Elsevier, vol. 303(1), pages 239-254.
    2. Cao, Kaiying & Xu, Yuqiu & Hua, Ye & Choi, Tsan-Ming, 2023. "Supplier or co-optor: Optimal channel and logistics selection problems on retail platforms," European Journal of Operational Research, Elsevier, vol. 311(3), pages 971-988.
    3. Qiao, Haike & Su, Qin, 2021. "Distribution channel and licensing strategy choice considering consumer online reviews in a closed-loop supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 151(C).
    4. Kittaka, Yuta & Matsushima, Noriaki & Saruta, Fuyuki, 2022. "Negative effect of price-matching policy on traditional retailers in a dual-channel supply chain with different content formats," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 161(C).
    5. Ma, Peng & Gong, Yeming & Mirchandani, Prakash, 2020. "Trade-in for remanufactured products: Pricing with double reference effects," International Journal of Production Economics, Elsevier, vol. 230(C).
    6. He, Peng & He, Yong & Xu, Henry, 2019. "Channel structure and pricing in a dual-channel closed-loop supply chain with government subsidy," International Journal of Production Economics, Elsevier, vol. 213(C), pages 108-123.
    7. Benrong Zheng & Chao Yang & Jun Yang & Min Zhang, 2017. "Dual-channel closed loop supply chains: forward channel competition, power structures and coordination," International Journal of Production Research, Taylor & Francis Journals, vol. 55(12), pages 3510-3527, June.
    8. Zhen, Xueping & Xu, Shuangshuang, 2022. "Who should introduce the third-party platform channel under different pricing strategies?," European Journal of Operational Research, Elsevier, vol. 299(1), pages 168-182.
    9. Alaei, Amir Mohammad & Taleizadeh, Ata Allah & Rabbani, Masoud, 2022. "Marketplace, reseller, or web-store channel: The impact of return policy and cross-channel spillover from marketplace to web-store," Journal of Retailing and Consumer Services, Elsevier, vol. 65(C).
    10. Matsui, Kenji, 2016. "Asymmetric product distribution between symmetric manufacturers using dual-channel supply chains," European Journal of Operational Research, Elsevier, vol. 248(2), pages 646-657.
    11. Lee, Sunghee & Yoo, Shijin & Kim, Daeki, 2016. "When is servitization a profitable competitive strategy?," International Journal of Production Economics, Elsevier, vol. 173(C), pages 43-53.
    12. Matsui, Kenji, 2024. "Should competing suppliers with dual-channel supply chains adopt agency selling in an e-commerce platform?," European Journal of Operational Research, Elsevier, vol. 312(2), pages 587-604.
    13. Niu, Baozhuang & Li, Qiyang & Mu, Zihao & Chen, Lei & Ji, Ping, 2021. "Platform logistics or self-logistics? Restaurants’ cooperation with online food-delivery platform considering profitability and sustainability," International Journal of Production Economics, Elsevier, vol. 234(C).
    14. Sun, Cuiying & Zhang, Xiong & Zhou, Yong-Wu & Cao, Bin, 2022. "Pricing, financing and channel structure for capital-constrained dual-channel supply chains with product heterogeneity," International Journal of Production Economics, Elsevier, vol. 253(C).
    15. Zhen-Zheng Zhang & Zong-Jun Wang & Li-Wen Liu, 2015. "Retail Services and Pricing Decisions in a Closed-Loop Supply Chain with Remanufacturing," Sustainability, MDPI, vol. 7(3), pages 1-24, February.
    16. Tianqin Shi & Dilip Chhajed & Zhixi Wan & Yunchuan Liu, 2020. "Distribution Channel Choice and Divisional Conflict in Remanufacturing Operations," Production and Operations Management, Production and Operations Management Society, vol. 29(7), pages 1702-1719, July.
    17. Wang, Yuyan & Yu, Zhaoqing & Shen, Liang & Jin, Mingzhou, 2022. "Operational modes of E-closed loop supply chain considering platforms’ services," International Journal of Production Economics, Elsevier, vol. 251(C).
    18. Zhou, Xiaoyang & Liu, He & Li, Jialu & Zhang, Kai & Lev, Benjamin, 2023. "Channel strategies when digital platforms emerge: A systematic literature review," Omega, Elsevier, vol. 120(C).
    19. Qian, Zhifeng & Day, Steven James & Ignatius, Joshua & Dhamotharan, Lalitha & Chai, Junwu, 2024. "Digital advertising spillover, online-exclusive product launches, and manufacturer-remanufacturer competition," European Journal of Operational Research, Elsevier, vol. 313(2), pages 565-586.
    20. Zhixin Chen & Shijian Hong & Xiang Ji & Ruixia Shi & Jie Wu, 2022. "Refurbished products and supply chain incentives," Annals of Operations Research, Springer, vol. 310(1), pages 27-47, March.

    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:jsusta:v:11:y:2019:i:19:p:5407-:d:272140. 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.