On the influence of collection cost on reverse channel configuration

Artikel

This paper revisits the impact of collection cost on a manufacturer’s optimal reverse channel choice. A manufacturer who remanufactures his own products has the choice between managing collection of used products himself, let the retailer manage collection or involve a third party company to manage collection. In particular, we consider a convex collection cost function depending on the collection rate. Contrary to previous literature, we show that the manufacturer always prefers retailer-managed collection, independent of collection cost. The retailer will always choose a positive collection rate. If collection cost is above a certain threshold, not all used products will be collected and the manufacturer (almost) collects all channel profits. Third party-managed collection is always dominated. In extensions, we also consider a restriction to equilibria and a minimum collection rate, which may be imposed by regulation. Both extensions may change the reverse channel choice to manufacturer-managed. Moreover, we see that it may be impossible for regulation to increase collection because the profit-maximizing collection rate may already be the highest economically viable one.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Journal of Business Economics ; ISSN: 1861-8928 ; Volume: 91 ; Year: 2020 ; Issue: 2 ; Pages: 179-213 ; Berlin, Heidelberg: Springer

Classification and Topics

• Classification: Management ; Business Administration: General
• Subject: Closed-loop supply chain ; Reverse logistics ; Remanufacturing ; Channel choice

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gönsch, Jochen ; Dörmann, Nora
• Event: Veröffentlichung
• (who): Springer
• (where): Berlin, Heidelberg
• (when): 2020

Further information

• DOI: doi:10.1007/s11573-020-00995-x
• Last update: 10.03.2025, 11:42 AM CET