Work

Trade‐in program options in a retailer‐led supply chain

Year: 2024

Type: article

Abstract: Firms offer trade‐in programs that consumers trade an old product and receive trade‐in rebate when buying a new one. To study whether the manufacturer or the retailer should introduce a trade‐in program, we build a Stackelberg game that consists of one manufacturer and one retailer by considering old and new consumers in a retailer‐led supply chain. We find that when the production cost of a product is high under no trade‐in program, old consumers do not purchase the product. When the retailer provides the trade‐in program, there are “lose–win” situation for the manufacturer and retailer. However, when the manufacturer provides the trade‐in program, there are “win–win” situation for the manufacturer and retailer. Then, we find that the manufacturer (retailer) can benefit more from providing trade‐in program by themselves than that provided by the other one.

Source: International Transactions in Operational Research

DOI: 10.1111/itor.13574

Authors: Wenyu Zhao, Yulan Xia, Lu Zhang, Xiaojun Fan

Institutions: Xi'an University of Finance and Economics, Shanghai University

Language: English

Topic: Supply Chain and Inventory Management

Subfield: Management Information Systems

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Responsible consumption and production

Open Access status: bronze

Funder: National Natural Science Foundation of China