Joint-advertising for collection of returned products in a closed-loop supply chain under uncertain environment

Abstract Advertising plays an important role in contributing to the supply of returned items and market expansion. In this paper, advertising is considered as a means to entice consumers to return used-items in a remanufacturing environment. We investigate the impact of sharing or of not sharing advertisement cost on the total profit gained and the quantity of used-items acquired under the uncertain demand of remanufactured/new products and uncertain returns. For analysis, we develop mathematical models for the following closed-loop supply chain configurations: (i) advertising by manufacturer with cost-sharing, (ii) advertising by retailer with cost-sharing, (iii) individual advertising with cost-sharing, (iv) centralized advertising, and finally, (v) advertising without cost-sharing. These models have been illustrated through a numerical study, and the results reveal that the closed-loop supply chain model with “centralized advertising configuration” performs better over other models, and also, that advertising provides positive economic and environmental benefits.

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