Consumers' purchasing decisions of a dual-channel supply chain system under return and warranty policies

ABSTRACT

With the rapid growth of internet technology, particularly during the COVID-19 pandemic, a major portion of consumers have intended to do online shopping. Also the use of eco-friendly products is essential in today's environment and human health. Thus this paper investigates the consumers' purchasing behaviour towards substitutable non-green and eco-friendly products in a dual-channel (offline and online channels) supply chain system. The manufacturer offers a novel combination of promotions such as a return policy in the online channel and a warranty policy in the offline channel depending on the position and situation of consumers. Here, the environmental burden is reduced by considering remanufacturing/refurbishing used products during the warranty period. Therefore, consumers' demand depends on price, eco-friendliness level, warranty and return agreements. The entire problem is modelled under centralised and decentralised decision-making scenarios. Finally, the profit maximisation problem is formulated and solved in the game theory framework. A series of sensitivity analyses of various parameters is conducted numerically to validate the problem. It is observed that, due to the instant return facility in the online channel, online demand is higher than the offline with a higher warranty period.

KEYWORDS:

• Dual-channel supply chain
• traditional and eco-friendly product
• warranty policy
• remanufacturing/refurbishing activity
• return policy
• Stackelberg game

Data availability statement

The authors declare that there are no real data used in this article. Some hypothetical data are used for the findings of this study and available within the article.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

The first author is thankful to Council of Scientific and Industrial Research (CSIR), Govt. of India for financial support (Sr. No. 1121841558). The sanction file number is 09/599(0085)/2019-EMR-I. The authors acknowledge the support given by the DST-FIST, India (SR/FST/MS-1/2018/21(C), dated-13/12/2019) for the upgradation of the research facility at the departmental level.

Notes on contributors

Mritunjoy Saha

Mr. Mritunjoy Saha received his M. Sc. in Mathematics from Kazi Nazrul University, Asansol, India. Currently, he is working as a Research Scholar at Vidyasagar University, Midnapore, W.B., India.

Raghu Nandan Giri

Dr. Raghu Nandan Giri ireceived his M. Sc. in Applied Mathematics and Ph. D. in science from Vidyasagar University, Midnapore, W.B., India. and M.Tech. from IIT, Kharagpur, W.B., India. He joined as Senior Software Engineer at Samsung India Software Operations Pvt Ltd, Bangalore in 2011. His research interest is in the field of Operations Research particularly Supply chain management, Inventory controlled, Transportation problems, etc.. Currently, he is working as an Assistant Professor at Vidyasagar University, Midnapore, W.B., India.