The Sales Channel Selection Strategy Of The Two-period Closed-loop Supply Chain Under Different Remanufacturing Modes

The selection of sales channels for new and remanufactured products is an important decision problem in a closed-loop supply chain(CLSC).For two remanufacturing modes of original equipment manufacturer(OEM)remanufacturing and independent third-party remanufacturer(TPR)remanufacturing,two-period game(optimization)models are established to analyze and compare the equilibrium prices,collection rates and profit allocations of channel members in a CLSC under four sales channel combinations: DI sales channel combination(direct selling of new products through an electronic channel and indirect selling of remanufactured products through a retailer),ID sales channel combination(indirect selling of new products through the retailer and direct selling of remanufacturing products through the electronic channel),DD sales channel combination(direct selling of both new products and remanufactured products)and II sales channel combination(indirect selling of both new products and remanufactured products).Then the influences of consumers' preference for remanufactured products and the additional cost of direct selling channel on equilibrium solutions and sales channel selection are explored by mathematical derivation and numerical simulation.Finally,two remanufacturing modes with the same parameters are also compared.The conclusions show that:(1)In OEM remanufacturing mode,when the additional cost of direct channel is zero,no matter how consumers' preference for remanufactured products changes,DD combination is the best choice for the OEM and CLSC system simultaneously,while II combination is the worst choice.DI combination is better than ID combination.From the perspective of retailer's profit and environmental performance,ID mode is the best.When the additional cost of direct channel is non-zero,any of DI,ID and DD combinations maybe the best choice for the OEM and CLSC system;DI combination will never be the worst choice for the OEM and CLSC system;II combination is always the worst choice for the OEM,but may not necessarily be the worst choice for the total system profit.Regardless of the change of the additional cost of direct channel,the retailer's profit under II combination is always the best,followed by ID combination and finally DI combination.(2)In TPR remanufacturing mode,since the OEM can protect its own interests through patent licensing mechanism,the consumer preference and the additional cost of direct marketing channel have similar effects on equilibrium prices,collection rates,the OEM's profit,the retailer's profit and total system profit as OEM remanufacturing mode.The remanufacturer's profit improves continually with the increase of the consumer preference.Either DI or ID combination may be the best choice for the remanufacturer with different additional costs in direct selling channel.Moreover,only the two combinations of DI and ID may be the Nash equilibrium strategies in the two parties' sales channel games.(3)By comparisons of OEM and TPR remanufacturing modes with the same initial parameters,it is found that for any of the four sales channel combinations,the first-period price in OEM remanufacturing mode is lower than that in TPR remanufacturing mode,while the collection rate in OEM remanufacturing mode is higher than that in TPR remanufacturing mode.Under ID combination,compared with TPR remanufacturing mode,the OEM can get higher profit but the retailer's profit and total system profit are lower in OEM remanufacturing mode.DD combination yields the higher OEM's profit and total system profit in OEM remanufacturing mode.Under II combination,both the OEM's profit and total system profit in TPR remanufacturing mode are superior to that in OEM remanufacturing mode;in contrast,the OEM remanufacturing mode has an advantage over the TPR remanufacturing mode in terms of the retailer's profit.The quantitative relations of channel members' profits between the two remanufacturing modes depend on additional cost of direct selling.The above conclusions can provide the firms who engage in collection and remanufacturing with theoretical supports on the selection of products' sales channels.