How manufacturer's integration strategies affect closed-loop supply chain performance

Abstract

This paper considers a manufacturer's optimal integration strategy in a three-level closed-loop supply chain including one manufacturer, one retailer and two competing collectors. We study how the manufacturer's integration strategies of retailing and collecting channels affect the closed-loop supply chain members' optimal decisions and maximum profits, and also investigate the interaction between the collection competition and the manufacturer's integration strategies. Through comparing various integration strategies, some new and interesting management insights are obtained: to improve collection rate of the whole closed-loop supply chain and maximise the surplus profit of integration strategy, the manufacturer's best opt is to integrate the retailer and only one collector when the collection competition is intense.