Coordination contracts of dual-channel with cooperation advertising in closed-loop supply chains

• Published in: International journal of production economics Vol. 183; pp. 528 - 538
• Main Authors: Xie, JiaPing, Liang, Ling, Liu, LuHao, Ieromonachou, Petros
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.01.2017
• Subjects: Channel conflict; Closed-loop supply chains; Contract coordination; Online to offline; Revenue sharing; Channel conflict; Contract coordination; Closed-loop supply chains; Online to offline; Revenue sharing
• ISSN: 0925-5273; 1873-7579
• DOI: 10.1016/j.ijpe.2016.07.026

On the background of an online/offline dual channel, this paper studies contract coordination of centralized and decentralized dual-channel closed-loop supply chains. With the feature of recycle rate fluctuation, we develop a revenue-sharing mechanism by taking the relationship between the recycle rate and the recycle revenue sharing ratio into consideration. After comparing of centralized decision and the manufacturing led decentralized decision, the optimal online/offline price, wholesale price and advertising investment are derived. The influence of revenue sharing ratio in forward and reverse channels on the online/offline prices and wholesale prices is discussed. The numeric example is used for observing the relationship between variables, and between the optimal profit and variables through analysis of changing parameter valuations. •A revenue sharing contract with reverse and forward channel is modeled under O2O's CLSC.•Recycling rate of used products is affected by reverse revenue sharing ratio.•All optimal prices are decreasing with respect to reverse revenue sharing ratio.•The CLSC profit is increasing with respect to reverse/forward revenue sharing ratio.•Advertising increases offline demand while double marginalization still exists.