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How Collection Cost Structure Drives a Manufacturer's Reverse Channel Choice
Author(s) -
Atasu Atalay,
Toktay L. Beril,
Van Wassenhove Luk N.
Publication year - 2013
Publication title -
production and operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.279
H-Index - 110
eISSN - 1937-5956
pISSN - 1059-1478
DOI - 10.1111/j.1937-5956.2012.01426.x
Subject(s) - data collection , channel (broadcasting) , business , reverse logistics , computer science , cost structure , operations management , operations research , industrial organization , microeconomics , supply chain , marketing , economics , telecommunications , statistics , mathematics
This note discusses the impact of collection cost structure on the optimal reverse channel choice of manufacturers who remanufacture their own products. Using collection cost functions that capture collection rate and collection volume dependency, we show that the optimal reverse channel choice (retailer‐ vs. manufacturer‐managed collection) is driven by how the cost structure moderates the manufacturer's ability to shape the retailer's sales and collection quantity decisions.