In the recycling and remanufacturing industry, used items are often recycled by a posted price (PP) mechanism. Recently, some online platforms of resource recycling also permit the seller to use the name-your-own-price (NYOP) mechanism, meaning that used items will only be recycled when the bid proposed by the seller is no larger than an opaque reserve price predetermined by the recycling agent. However, in the academic field of closed-loop supply chain, thus far, few researches have been conducted on investigating the NYOP mechanism. In this paper, it's aimed to investigate the optimal strategies in a closed-loop supply chain under three pricing mechanisms:posted price, single-bid NYOP and double-bid NYOP when consumers can additionally propose a second bid if the first bid fails. A Stackelberg game is employed to analyze consumers' and the manufacturer's strategies where the latter acts as the leader and the former act as a follower. Based on the nonlinear optimization, the optimal bid for the consumer and the optimal reserve price for the recycling agent under aforementioned three pricing mechanisms are obtained. Furthermore, the optimal strategies among those three pricing mechanisms are compared in terms of profit as well. Result shows that the double-bid mechanism brings about more expected utility for consumers, however, from the perspective of the manufacturer's profit, the double-bid NYOP mechanism is an inferior strategy. In addition, whether the manufacture adopts the single-bid NYOP mechanism or the posted price mechanism depends on saved cost due to remanufacturing activities and the upper bound of the reserve price. If the upper bound of the reserve price is lower than a certain threshold, as the saved cost increases, the optimal strategy is converted from PP mechanism to the single-bid NYOP mechanism. However, if the upper bound is higher than the threshold, PP mechanism is always the optimal strategy. Moreover, we investigate the effects of key parameters such as the ratio of green consumers on the manufacturer's profit through numerical studies, and obtain some managerial insights including that the manufacturer should reveal more information such as a lower upper bound of the reserve price to the consumers. Our research enriches the study of consumers' behavior in the closed-loop supply chain, and provides a reasonable explanation to observations in the recycling industry. These results can also help the manufacturer to choose the optimal pricing mechanism to enhance his profit as well as environmental performance.
LI Jian-bin, ZHU Meng-ping, DAI Bin
. Research on Optimal Strategies in a Closed-loop Supply Chain under NYOP and Posted Price Mechanism[J]. Chinese Journal of Management Science, 2016
, 24(10)
: 105
-116
.
DOI: 10.16381/j.cnki.issn1003-207x.2016.10.012
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