A two-stage reverse supply chain model for pricing remanufactured products under collection policy and promotional incentives: A game theory approach

Adibpour, N.; Keramati, A.

Growing Science » Uncertain Supply Chain Management » A two-stage reverse supply chain model for pricing remanufactured products under collection policy and promotional incentives: A game theory approach

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Uncertain Supply Chain Management

ISSN 2291-6830 (Online) - ISSN 2291-6822 (Print) Quarterly Publication Volume 14 Issue 3 pp. 227-246 , 2026

A two-stage reverse supply chain model for pricing remanufactured products under collection policy and promotional incentives: A game theory approach Pages 227-246 Download PDF

Authors: Navid Adibpour, Amin Keramati

DOI: 10.5267/j.uscm.2025.3.003

Keywords: Remanufacturing, Reverse supply chain, Stackelberg game, Vehicle routing problem, Pricing strategy, Sustainability advertising

Abstract: The efficient management of reverse supply chains, particularly the collection and remanufacturing of defective products, plays a critical role in reducing production costs and determining the final pricing of remanufactured products. While existing research extensively explores warranty policies and maintenance services to enhance customer satisfaction and profitability, the integration of vehicle routing for product collection and sustainability advertising strategies remains underexplored. Addressing this gap, this study introduces a comprehensive two-stage reverse supply chain model that captures the interactions between manufacturers (MFRs) and remanufacturers (RMFRs) through a Stackelberg game framework. Methods: The proposed model incorporates interactive production constraints, vehicle routing problem (VRP) for optimizing collection logistics, and sustainability advertising to influence consumer behavior towards remanufactured products. Utilizing mixed nonlinear programming (MINLP) and nonlinear programming (NLP) techniques, the model simultaneously optimizes pricing strategies, collection efforts, and advertising investments for both MFRs and RMFRs. Numerical analyses are conducted to solve the optimization problems, accompanied by sensitivity analyses to evaluate the impact of key parameters such as production costs, defect rates, and routing constraints. The numerical results demonstrate that increases in production costs for MFRs lead to higher selling prices, thereby reducing their profit margins and negatively impacting RMFR profitability due to decreased demand for remanufactured products. Sensitivity analysis reveals that higher defect rates (α ≥ 0.8) significantly diminish overall supply chain profitability by lowering customer acceptance of RMPs. Additionally, expanding the allowable vehicle routing distance L effectively reduces collection costs, enhancing RMFR profits and enabling greater investment in sustainability advertising. The study shows that the integration of VRP and advertising strategies proves crucial in balancing cost efficiencies and market competitiveness, ultimately fostering a more sustainable and profitable reverse supply chain.

How to cite this paper

 Adibpour, N & Keramati, A. (2026). A two-stage reverse supply chain model for pricing remanufactured products under collection policy and promotional incentives: A game theory approach.Uncertain Supply Chain Management, 14(3), 227-246.

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