Pricing strategy of closed loop supply chain considering different CSR investment modes

Abstract

More and more companies are beginning to realize that incorporating corporate social responsibility (CSR) and sustainable development into supply chain strategies and operations can bring them more competitive advantages. In the case that the manufacturer or retailer performs CSR through profit donation, the pricing decision-making problem of closed-loop supply chain (CLSC) with dominant retailer under different CSR investment modes is studied. The decision-making models of CLSC under the manufacturer’s and retailer’s CSR investment mode are constructed respectively. The conditions for enterprises to fulfil CSR through profit donation and the influence of different CSR investment modes on the pricing of new products and recycling of waste products are discussed. The research shows that no matter what kind of CSR investment mode, only when the consumers are more sensitive to the CSR investment of enterprises, the manufacturer and retailer will fulfil the CSR through profit donation. The CSR investment mode of the manufacturer is more beneficial to consumers, environment, CLSC members and whole system. No matter whether the dominant retailer carries out CSR investment or not, she always obtains more channel profits than the manufacturer.

Keywords

• closed-loop supply chain
• corporate social responsibility
• profit donation
• dominate retailer
• pricing decision