Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/289109 
Year of Publication: 
2020
Citation: 
[Journal:] Journal of Business Economics [ISSN:] 1861-8928 [Volume:] 91 [Issue:] 2 [Publisher:] Springer [Place:] Berlin, Heidelberg [Year:] 2020 [Pages:] 179-213
Publisher: 
Springer, Berlin, Heidelberg
Abstract: 
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.
Subjects: 
Closed-loop supply chain
Reverse logistics
Remanufacturing
Channel choice
JEL: 
M10
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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