Discounting strategies' effects on a closed-loop dual-channel environmentally friendly supply chain of complementary products under sales effort

ABSTRACT

The relevance and impact of the internet are growing in every aspect of daily life, particularly in business which has the potential to address a lot of issues and transform many conventional techniques and procedures, including distribution. Many manufacturers have expanded their traditional retail channels to include a channel to trade the products to consumers exclusively. This paper investigates the pricing decision and the effect of discounting in a dual-channel closed-loop supply chain with two green complementary products by exploring the market demand is linearly correlated with the product selling prices, sales effort level and green innovation level. Here, four different models are analysed analytically under a game-theoretic methodology and then validated the findings using a numerical example. Additionally, the sensitivity analysis is performed to investigate the impacts of a few significant critical parameters on the supply chain participants. The findings of the article demonstrate how environmentally and economically advantageous green innovation can raise profits throughout the supply chain. Also, it is worth noting that sales efforts contribute to an increase in supply chain profit. Moreover, the discounts policy proves to be more profitable when the discount rate surpasses a specific threshold.

KEYWORDS:

• Dual-channel
• closed-loop supply chain
• complementary products
• green products
• sales effort
• vertical Nash
• Stackelberg

Acknowledgements

The authors would like to express their gratitude to the editors and referees for their valuable suggestions and corrections to enhance the clarity of the present article. First author sincerely acknowledges the financial support given by the Council of Scientific & Industrial Research, Government of India under CSIR JRF/SRF Fellowship (File no. 090025(12163)2021-EMR-I).

Data availability statement

The authors confirm that the data supporting the findings of this study are available within the article.

Disclosure statement

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

Additional information

Notes on contributors

Subir Guin

Subir Guin is currently working as a Junior Research Fellow at the Department of Mathematics, The University of Burdwan, India supported by Council of Scientific and Industrial Research (CSIR), New Delhi, after qualifying in the NET (National Eligibility Test). He received his B.Sc. and M.Sc. degree in Mathematics from the The University of Burdwan, India. He has published several papers in international journals of repute in the areas of supply chain management.

Amit Sarkar

Amit Sarkar is an Assistant Professor in the Department of Mathematics, Brainware University, West Bengal, India. He was a senior research fellow and received his Ph.D. degree from the University of Burdwan, India. He haspublished several research papers in international journals of repute in the areas of supply chain management.

Brojeswar Pal

Brojeswar Pal is an Assistant Professor in the Department of Mathematics, The University of Burdwan, West Bengal, India. He received his Ph.D. degree from the Jadavpur University, India.He has published several research papers in international journals of repute in the areas of production planning, inventory control and supply chain management.