Customer-centric economic policies of closed-loop dual-channel supply chain with product-quality practices and versatile refunds in online channel

¹ International Business School Suzhou, Xi’an Jiaotong-Liverpool University, 215123 Suzhou, P.R. China
² School of Tourism and Finance & Trade, Meishan Vocational & Technical College, Meishan, P.R. China
³ Department of Mathematics, Indian Institute of Engineering Science and Technology, Shibpur, Howrah 711103, India
⁴ School of Applied Science & Humanities, Haldia Institute of Technology, Haldia, Haldia 721657, West Bengal, India
⁵ Department of Mathematics, Sonarpur Mahavidyalaya, Kolkata 700149, India

^* Corresponding author: yangsiyu1408@outlook.com

Received: 30 October 2022
Accepted: 14 February 2025

Abstract

The present study aims to excavate some sustainable policies for a closed-loop dual-channel supply chain with single manufacturer and single retailer, all while placing a strong emphasis on enhancing customer satisfaction through the product-quality and versatile refund for unsatisfactory products in the online channel. In contrast to the majority of existing literature, this study explores the potential benefits of implementing a return policy and increasing recycling-related investments, thereby ensuring managers’ environmental goals to align with organizations’ profitability. After defuzzification of fuzzy parameters by employing fuzzy possibility measures, this study calculates the maximum expected operating profit of the whole supply chain under centralized decision support system, and that of the manufacturer under decentralized decision support system, considering five major decisions, namely the quality level of online products, the return ratio of used products, the manufacturer’s wholesale and online sale prices, and the retailer’s sale price. Current analytical results plead the manufacturer to prioritize providing consistent product-quality in the online channel, regardless of the presence of its return policy. The manufacturer should cautiously increase its recycling-related investments, whereas this study proposes the retailer to mitigate potential increases in sale prices while adhering to environmental goals. In a customer-centric sustainable approach, this study pleads the manufacturer to target self-price sensitive online customers with lower-priced products, while offering discounts to the retail customers. Besides, this study advocates for fostering collaborative relationships between the manufacturer and the retailer.