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Optimal reverse channel for end‐of‐life vehicle closed‐loop supply chains

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  • Junfei Ding
  • Wen Zhang
  • Xujin Pu

Abstract

This study examines a manufacturer selling directly to customers has three modes for acquiring end‐of‐life vehicles with a key component supplier: supplier‐collection, manufacturer‐collection, and third‐party‐collection modes. We find that the supplier, who is farther away from customers, is the optimal agent to be responsible for recovery activity. Following, we design a simple transfer price contract for the supplier‐collection mode such that the recovery rate achieves the centralized level. Subsequently, a fixed payment is proposed to compensate the supplier, thereby realizing Pareto improvement. Finally, we consider the supplier as the Stackelberg leader and find opposite results regarding optimal reverse channel structure.

Suggested Citation

  • Junfei Ding & Wen Zhang & Xujin Pu, 2025. "Optimal reverse channel for end‐of‐life vehicle closed‐loop supply chains," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(1), pages 529-544, January.
    • Handle: RePEc:wly:mgtdec:v:46:y:2025:i:1:p:529-544
    DOI: 10.1002/mde.4389
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