IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i8p6619-d1122957.html
   My bibliography  Save this article

A Dual-Channel Strategy for Online Recovery Platforms to Increase Recovery Quantity and Profits

Author

Listed:
  • Weidong Zhang

    (School of Business, Central South University, Changsha 410083, China)

  • Xueqing Huang

    (School of Business, Central South University, Changsha 410083, China)

  • Fuqiang Wang

    (School of Business, Central South University, Changsha 410083, China)

Abstract

With the rapid development of information technology and communication technology, several online recovery platforms have introduced offline channels to encourage customers to participate in product acquisition and improve profits. Motivated by this reverse supply chain practice, we develop a game theory model under three scenarios (single offline channel, single online channel, and dual-channel structures) to assess the effect of a newly added offline channel for online recovery platforms and explore the factors that have significant impacts on the dual-channel strategy for recovery platforms. We conduct static analyses to solve the model and perform a numerical study to examine the robustness of the results. The results reveal that a recovery platform can always gain more profit and set lower recovery prices under the dual-channel structure. However, the relatively high shipping cost might cause the recovery platform to recover a smaller quantity under the dual-channel structure compared with the single offline channel structure. In addition, the recovery platform is more likely to adopt a dual-channel structure with low shipping cost, high average hassle cost or hassle cost uncertainty, and less uncertainty on the reservation value. Moreover, the recovery platform can use the price difference between online and offline channels as a tool to split product holders and induce them to choose the most appropriate channel. Our findings highlight the profit and recovery quantity benefits brought by the dual-channel structure, and provide management insights for recovery platforms.

Suggested Citation

  • Weidong Zhang & Xueqing Huang & Fuqiang Wang, 2023. "A Dual-Channel Strategy for Online Recovery Platforms to Increase Recovery Quantity and Profits," Sustainability, MDPI, vol. 15(8), pages 1-27, April.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:8:p:6619-:d:1122957
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/8/6619/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/8/6619/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jin, Delong & Caliskan-Demirag, Ozgun & Chen, Frank (Youhua) & Huang, Min, 2020. "Omnichannel retailers’ return policy strategies in the presence of competition," International Journal of Production Economics, Elsevier, vol. 225(C).
    2. Wang, Nengmin & He, Qidong & Jiang, Bin, 2019. "Hybrid closed-loop supply chains with competition in recycling and product markets," International Journal of Production Economics, Elsevier, vol. 217(C), pages 246-258.
    3. Leela Nageswaran & Soo-Haeng Cho & Alan Scheller-Wolf, 2020. "Consumer Return Policies in Omnichannel Operations," Management Science, INFORMS, vol. 66(12), pages 5558-5575, December.
    4. He, Qidong & Wang, Nengmin & Yang, Zhen & He, Zhengwen & Jiang, Bin, 2019. "Competitive collection under channel inconvenience in closed-loop supply chain," European Journal of Operational Research, Elsevier, vol. 275(1), pages 155-166.
    5. Fei Gao & Xuanming Su, 2017. "Online and Offline Information for Omnichannel Retailing," Manufacturing & Service Operations Management, INFORMS, vol. 19(1), pages 84-98, February.
    6. Yu, Jinglei & Williams, Eric & Ju, Meiting, 2010. "Analysis of material and energy consumption of mobile phones in China," Energy Policy, Elsevier, vol. 38(8), pages 4135-4141, August.
    7. 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.
    8. Huang, Min & Song, Min & Lee, Loo Hay & Ching, Wai Ki, 2013. "Analysis for strategy of closed-loop supply chain with dual recycling channel," International Journal of Production Economics, Elsevier, vol. 144(2), pages 510-520.
    9. Stefan Hahler & Moritz Fleischmann, 2017. "Strategic Grading in the Product Acquisition Process of a Reverse Supply Chain," Production and Operations Management, Production and Operations Management Society, vol. 26(8), pages 1498-1511, August.
    10. Bing Jing, 2018. "Showrooming and Webrooming: Information Externalities Between Online and Offline Sellers," Marketing Science, INFORMS, vol. 37(3), pages 469-483, May.
    11. Cao, James & So, Kut C. & Yin, Shuya, 2016. "Impact of an “online-to-store” channel on demand allocation, pricing and profitability," European Journal of Operational Research, Elsevier, vol. 248(1), pages 234-245.
    12. Matsui, Kenji, 2023. "Dual-recycling channel reverse supply chain design of recycling platforms under acquisition price competition," International Journal of Production Economics, Elsevier, vol. 259(C).
    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. 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. Yan, Shuai & Archibald, Thomas Welsh & Han, Xiaohua & Bian, Yiwen, 2022. "Whether to adopt “buy online and return to store” strategy in a competitive market?," European Journal of Operational Research, Elsevier, vol. 301(3), pages 974-986.
    3. Matsui, Kenji, 2022. "Optimal timing of acquisition price announcement for used products in a dual-recycling channel reverse supply chain," European Journal of Operational Research, Elsevier, vol. 300(2), pages 615-632.
    4. Wang, Yong & Jiang, Qiong & Guan, Xu & Guan, Xiangyang, 2023. "Recycling channel design and coordination in a reverse supply chain with customer green preference," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    5. Matsui, Kenji, 2023. "Dual-recycling channel reverse supply chain design of recycling platforms under acquisition price competition," International Journal of Production Economics, Elsevier, vol. 259(C).
    6. Shen, Yinhai & Zhang, Qing & Zhang, Zhichao & Ma, Xinyu, 2022. "Omnichannel retailing return operations with consumer disappointment aversion," Operations Research Perspectives, Elsevier, vol. 9(C).
    7. 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).
    8. Huang, Lingchen & Liu, Bin & Zhang, Rong, 2024. "Channel strategies for competing retailers: Whether and when to introduce live stream?," European Journal of Operational Research, Elsevier, vol. 312(2), pages 413-426.
    9. Peng He & Tong-Yuan Wang & Qi Shang & Jun Zhang & Henry Xu, 2024. "Knowledge mapping of e-commerce supply chain management: a bibliometric analysis," Electronic Commerce Research, Springer, vol. 24(3), pages 1889-1925, September.
    10. Park, YoungSoo & Sim, Jeongeun & Kim, Bosung, 2022. "Online retail operations with “Try-Before-You-Buy”," European Journal of Operational Research, Elsevier, vol. 299(3), pages 987-1002.
    11. Xuemei Zhang & Haodong Zheng & Tao Hang & Qiang Meng, 2024. "How to Choose Recycling Mode between Monopoly and Competition by Considering Blockchain Technology?," Sustainability, MDPI, vol. 16(15), pages 1-29, July.
    12. Xuxin Lai & Nengmin Wang & Bin Jiang & Tao Jia, 2024. "Choosing Recovery Strategies for Waste Electronics: How Product Modularity Influences Cooperation and Competition," Sustainability, MDPI, vol. 16(20), pages 1-31, October.
    13. Qifan Hu & Bing Xu, 2019. "Differential Game Analysis of Optimal Strategies and Cooperation in Omni-Channel Organic Agricultural Supply Chain," Sustainability, MDPI, vol. 11(3), pages 1-34, February.
    14. He, Bo & Gupta, Varun & Mirchandani, Prakash, 2021. "Online selling through O2O platform or on your own? Strategic implications for local Brick-and-Mortar stores," Omega, Elsevier, vol. 103(C).
    15. Zhou, Yong-Wu & Zhang, Xiong & Zhong, Yuanguang & Cao, Bin & Cheng, T.C. Edwin, 2021. "Dynamic pricing and cross-channel fulfillment for omnichannel retailing industry: An approximation policy and implications," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    16. Hong, Xianpei & Cao, Xinlu & Gong, Yeming & Chen, Wanying, 2021. "Quality information acquisition and disclosure with green manufacturing in a closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 232(C).
    17. Fu, Lingxian & Tang, Jie & Meng, Fanyong, 2021. "A disease transmission inspired closed-loop supply chain dynamic model for product collection," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    18. Yang, Guangyong & Ji, Guojun, 2022. "The impact of cross-selling on managing consumer returns in omnichannel operations," Omega, Elsevier, vol. 111(C).
    19. Li, Yanran & Li, Bo & Zheng, Wei & Chen, Xue, 2021. "Reveal or hide? Impact of demonstration on pricing decisions considering showrooming behavior," Omega, Elsevier, vol. 102(C).
    20. Jena, Sarat Kumar & Meena, Purushottam, 2022. "Shopping in the omnichannel supply chain under price competition and product return," Journal of Retailing and Consumer Services, Elsevier, vol. 65(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:jsusta:v:15:y:2023:i:8:p:6619-:d:1122957. 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.