Pricing Strategies in a Dual-Channel Green Closed-Loop Supply Chain Considering Incentivized Recycling and Circular Economy

In this study, we examine multi-level, dual-channel green closed-loop supply chain (CLSC) that incorporates circular economy (CE) principles. We focus on the implementation of an incentive-based recycling program for customers, and the investigation of various CLSC settings, such as centralized, decentralized, and collaborative, to determine the optimal equilibrium prices, greening levels, and advertising strategies. A unique contribution of this study is the simultaneous consideration of greening and incentivized recycling, which is a crucial aspect in today’s environmental-conscious era. We formulate demand functions to incorporate price elasticity, greenness, and advertising under various strategies. The performance of these models is evaluated using multiple numerical examples and a case study from the clothing industry. Our findings indicate that a collaborative approach outperforms decentralization in terms of greening level and that this approach ensures the profitability of both members and the entire supply chain. Furthermore, our study suggests that centralization does not guarantee the maximum profitability of members, even though the entire chain attains its profit peak. This highlights the importance of considering the trade-offs between centralization and decentralization when designing CLSCs. We provide valuable insights for managers and policymakers to improve CLSC design and performance