Product collection structures in closed-loop supply chains

Collecting used products from customers is an important task in closed-loop supply chains. In this research, we consider three single-channel structures, three dual-channel structures and one triple-channel structure for collecting used products. In single channel structures, a manufacturer, a retailer or a third-party collects used products. In dual channel structures, two members, and in the triple channel structure, all three members collect products. In all structures, the manufacturer sells original products to the retailer, and then the retailer sells the final product to a market with price-dependent demand. We optimize both the manufacturer and retailer’s pricing decisions. The level of effort for collecting used products is also optimized by the collector member(s) in each structure. We compare these structures from the manufacturer’s viewpoint, as the main member who designs these structures. We find conditions under which each structure outperforms others. In single channel structures the manufacturer is better off collecting used products by itself if the market base demand is less than the coefficient of collecting cost. In dual channel structures, the manufacturer is better off collecting used products jointly with the retailer or the third-party, depending on model parameters. We also determine a threshold for the coefficient of collecting cost above which the manufacturer benefits from employing the triple channel structure.