Pricing and return strategies in a dual-channel closed loop supply chain considering complementary products and sales effort

Waste materials are polluting the environment as they are being stored. Additionally, with a shortage of raw materials and energy sources, remanufacturing would be beneficial. In this paper, we discuss a dual-channel closed-loop supply chain of a pair of complementary products involving two manufacturers and one retailer. The manufacturer of main products distributes the products through both online and traditional retail channels, while the manufacturer of complementary products does so only through the online channel. For remanufacturing, two manufacturers collect their end-of-used products through only the online channels. Then the pricing and remanufacturing decision problem is modelled based on four-game (centralised, vertical Nash, manufacturer Stackelberg, and retailer Stackelberg) models, which differ in power structures. After that, the optimal results of the manufacturers and the retailer are analysed. Finally, a numerical result is proposed to analyse the analytical results and sensitivity to the respective parameters. Based on our research, we determined that channel and retailer profit along with return rate is highest for the centralised model, whether channel and retailer profit and sales effort are maximum for the manufacturer Stackelberg model under decentralised environment.