Open Access

ARTICLE

Research on Alliance Decision of Dual-Channel Remanufacturing Supply Chain Considering Bidirectional Free-Riding and Cost-Sharing

by Lina Dong, Yeming Dai^*

School of Business, Qingdao University, Qingdao, China

* Corresponding Author: Yeming Dai. Email:

(This article belongs to the Special Issue: Data-Driven Robust Group Decision-Making Optimization and Application)

Computer Modeling in Engineering & Sciences 2024, 140(3), 2913-2956. https://doi.org/10.32604/cmes.2024.049214

Received 30 December 2023; Accepted 17 April 2024; Issue published 08 July 2024

Abstract

This study delves into the formation dynamics of alliances within a closed-loop supply chain (CLSC) that encompasses a manufacturer, a retailer, and an e-commerce platform. It leverages Stackelberg game for this exploration, contrasting the equilibrium outcomes of a non-alliance model with those of three differentiated alliance models. The non-alliance model acts as a crucial benchmark, enabling the evaluation of the motivations for various supply chain entities to engage in alliance formations. Our analysis is centered on identifying the most effective alliance strategies and establishing a coordination within these partnerships. We thoroughly investigate the consequences of diverse alliance behaviors, bidirectional free-riding and cost-sharing, and the resultant effects on the optimal decision-making among supply chain actors. The findings underscore several pivotal insights: (1) The behavior of alliances within the supply chain exerts variable impacts on the optimal pricing and demand of its members. In comparison to the non-alliance (D) model, the manufacturer-retailer (MR) and manufacturer-e-commerce platform (ME) alliances significantly lower both offline and online resale prices for new and remanufactured goods. This adjustment leads to an enhanced demand for products via the MR alliance’s offline outlets and the ME alliance’s online platforms, thereby augmenting the profits for those within the alliance. Conversely, retailer-e-commerce platform (ER) alliance tends to increase the optimal retail price and demand across both online and offline channels. Under specific conditions, alliance behavior can also increase the profits of non-alliance members, and the profits derived through alliance channels also exceed those from non-alliance channels. (2) The prevalence of bidirectional free-riding behavior largely remains constant across different alliance configurations. Across these models, bidirectional free-riding typically elevates the equilibrium prices in offline channel while negatively affecting the equilibrium prices in other channel. (3) The effect of cost-sharing shows relative uniformity across the various alliance models. Across all configurations, cost-sharing tends to reduce the manufacturer’s profits. Nonetheless, alliances initiated by the manufacturer can counteract these negative impacts, providing a strategic pathway to bolster CLSC profitability.

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Keywords

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