Exploring the strategies of online and offline recycling channels in closed-loop supply chain under government subsidy.

ABSTRACT

The influence of online and offline dual recycling channels in a closed-loop supply chain (CLSC) is investigated in our work. The CLSC models of three recycling modes (single online recycling, single offline recycling, and dual recycling channels of online and offline) are established, respectively, and the impact of government subsidies on the pricing decision-making and recycling mode selection of channel members is therefore researched. The study found that the remanufacturer sets appropriate recycling price and transfer price to coordinate online and offline recycling channels and maximize its profits in the dual recycling modes; collector's offline recycling faces the competitive threat of remanufacturers' online recycling under the dual recycling modes, so the collector prefers a single offline recycling mode; the relationship between the collection quantities of the three modes depends on consumers' preference of the online recycling channel. In the meanwhile, it is illustrated that government subsidy plays a positive role in promoting the recycling and remanufacturing willingness of remanufacturers and collectors. This work provides practical insights for the CLSC system to make recycle decisions.