The value of information sharing in a dual-channel closed-loop supply chain

¹ College of Management, Shenzhen University, 3688 Nanhai Ave, Shenzhen 518060, P.R. China
² School of Economics and Management, Huazhong Agricultural University, 1 Shizishan Road, Wuhan 430070, P.R. China
³ School of Management, Huazhong University of Science and Technology, 1037 Luoyu Road, Wuhan 430074, P.R. China

^* Corresponding author: ythuang4028@163.com

Received: 19 October 2020
Accepted: 1 June 2021

Abstract

This paper considers a dual-channel closed-loop supply chain consisting of a manufacturer, a retailer and a collector in which the retailer possesses private demand information and determines whether to share his private information with other chain members. Specifically, we develop four information sharing models, namely no information sharing (Model C–R), the retailer sharing information with the manufacturer (Model C–R–M), the retailer revealing information to the collector (Model C–R–C), and the retailer disclosing information to both the manufacturer and the collector (Model C–R–T). We adopt the Stackelberg game to acquire the equilibrium strategies and examine the value of information sharing on chain members’ decisions. We find that, chain members will set the largest wholesale price, retail prices of direct and indirect channels when the retailer only shares information with the manufacturer and the highest return rate can be obtained in the case of the retailer only revealing information to the collector. We can also find that, information sharing is profitable to the manufacturer and the collector, while is detrimental to the retailer. The manufacturer, the collector and the retailer can reach the largest profits in Model C–R–T, Model C–R–C and Model C–R–M, respectively.