Manufacturers'Trade-In Channel Decisions in Closed-Loop Supply Chains
This paper studies whether the manufacturer should independently offer trade-in service himself or allow his retailer to offer trade-in service in a closed-loop supply chain consisting of one manufacturer and one retailer,where either the manufacturer or the retailer may provide trade-in services and bear the corresponding fixed trade-in cost.It first develops three decision models for the closed-loop supply chain under the scenarios of no trade-in service,manufacturer undertaking trade-in service,and retailer undertaking trade-in service,respectively.Then,it analyzes the game in offering trade-in services between the supply chain members when considering fixed trade-in cost.The results show that with the change in the fixed trade-in cost,the manufacturer and the retailer may get into conflict because both of them prefer to offer the trade-in service or both prefer to be a"free rider",instead of undertaking the trade-in service by himself/herself.In this case,either of them can eliminate such conflict,or"free-riding",by providing appropriate compensations to the other,thus both sides are more profitable than when no trade-in service is available.However,as the total profit of the closed-loop supply chain system is still sub-optimal,the manufacturer can further design corresponding contracts based on the centralized decision model to achieve closed-loop supply chain coordination.