Reverse Supply Chain Systems Coordination Across Multiple Links With Duopolistic Third Party Collectors

The proper supply of end-of-life (EOL) items plays a critical role in the success of remanufacturing systems. In many real-world practices, a remanufacturer has multiple links with independent third party collectors, while these links should be simultaneously coordinated. However, most previous studies mainly focus on reverse supply chain (RSC) coordination in a one-to-one setting (single link). Moreover, the competition among third party collectors affects the acquisition of EOL products and this is an important issue. In this paper, an RSC consisting of a single remanufacturer and duopolistic competing third party collectors is explored and a new mechanism is proposed to achieve channel coordination across multiple links. To be specific, we consider the case when the collectors compete on the acquisition prices offered to the consumers and the remanufacturer decides on the pricing and environmental effort decisions with two considerations: 1) increasing return of EOL items and 2) boosting demand of remanufactured products. The optimal decisions of RSC members and performance of RSC are analyzed under different behaviors of competing collectors. Moreover, a multilateral two-part tariff contract is proposed to coordinate the decisions across multiple links. The results indicate that the proposed contract improves not only profits of the remanufacturer and competing collectors but also the collection quantity of EOL items and demand of remanufactured products, which helps improve the environment.