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Competition of Forward and Reverse Supply Chain for Selling Two Substitutable Products: Novel Game Theory Approach

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Abstract

Nowadays, most people are concerned about environmental pollution. So, utilizing eco-friendly products is on the rise in society. There is a trend going on among the companies to make green products. However, some companies produce non-green substitutable products in the environmentally concerned market. Therefore, examining how these two organizations compete in the market is necessary. This paper analyzes the competition between two supply chains, a forward chain and a reverse chain for the very first time. Each chain is constituted of one manufacturer and one retailer. The first manufacturer of the forward chain makes a green product, whereas the second manufacturer of the reverse chain makes a substitutable non-green product. In addition, for non-green products, the second manufacturer offers a warranty period for refurbishing defective items. Two game theory models (centralized and decentralized) are developed and compared for the competition among manufacturers and retailers involved in two supply chains. In the competitive market, how the two manufacturers and retailers set their pricing strategies, greening level, and the warranty period are investigated. Finally, numerical and sensitivity analyses have been performed to examine the effect of various parameters on key decision variables of the supply chain problem.

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Funding

The first author is financially supported by the Council of Scientific and Industrial Research (CSIR), India, for financial assistance in the form Junior Research Fellowship (file no: 09/1007(0006)/2019-EMR-I).

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Authors and Affiliations

  1. Department of Mathematics and Humanities, Sardar Vallabhbhai National Institute of Technology, Surat-395007, Gujarat, India

    Animesh Mondal & Ranjan Kumar Jana

  2. School of Applied Science & Humanities, Haldia Institute of Technology, Haldia Purba Midnapur-721657, West Bengal, India

    Dipak Kumar Jana

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  1. Animesh Mondal
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Contributions

DKJ has formulated the model. The model evaluation and writing part was done by AM. RKJ has done the numerical and sensitivity analysis.

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Correspondence to Dipak Kumar Jana.

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Mondal, A., Jana, D.K. & Jana, R.K. Competition of Forward and Reverse Supply Chain for Selling Two Substitutable Products: Novel Game Theory Approach. Oper. Res. Forum 3, 66 (2022). https://doi.org/10.1007/s43069-022-00175-3

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