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Mathematical Problems in Engineering
Volume 2018 (2018), Article ID 1510959, 16 pages
Research Article

A Closed-Loop Supply Chain with Trade-In Strategy under Retail Competition

1School of Management, Hangzhou Dianzi University, Hangzhou 310018, China
2School of Management, Huazhong University of Science and Technology, Wuhan 430074, China

Correspondence should be addressed to Yanting Huang

Received 29 September 2017; Revised 10 December 2017; Accepted 17 December 2017; Published 18 January 2018

Academic Editor: Vladimir Turetsky

Copyright © 2018 Yanting Huang. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


This paper investigates a closed-loop supply chain (CLSC) consisting of a manufacturer and two competing retailers who collect used products through trade-in strategy. Three remanufacturing models with trade-in strategy have been developed: the manufacturer implements trade-in strategy (Model M), single retailer collects used products through trade-in strategy (Model SR), and two retailers undertake trade-in activities (Model TR). We analyze the impact of trade-in strategy on equilibrium decisions and chain members’ profits when retailing is competitive. We show that, as for the manufacturer, he prefers the case where trade-in is implemented by himself due to the direct benefits from remanufacturing, and the case of single retailer implementing trade-in strategy is the most unfavorable for the environment. We also show that, if the net value of a used product is sufficiently large, the retailer only selling products benefits from the case of the manufacturer implementing trade-in strategy because the manufacturer can coordinate both the forward and reverse flows, and Model M dominates Model TR for the retailer who undertakes both product sales and trade-in strategy. Moreover, a larger trade-in rebate can be achieved when two retailers simultaneously conduct trade-in strategy due to the intense competition between two retailers.