Optimal Decisions for Reverse Supply Chain Considering IERs of Dual Collection Channel

As one collection channel, online collection of used-products in reverse supply chain has become very important. In reverse supply chain with IERs (Inspection Error Rates) and dual collection channel, the dual collection channel refers to online collection channel and traditional offline collection channel. In online collection channel, the remanufacturer collects used-products via his collection center. In offline collection channel, the third party collector is responsible for collecting used-products. After collecting, the collection center and the third party collector carry out inspection activities with IERs. Considering their different IERs, we present the optimal price decisions for the third party collector, the remanufacturer and his collection center. By numerical example, we analyze the impacts of IERs and market share ratio on the optimal decisions. The research results show that: the third party collector intents to decrease his IERs so as to get more profits, and the remanufacturer's profit also increase owing to the IERs decreasing; however, the remanufacturer should pay more attention to the IERs decreasing in order to avoid losing market share ratio.