Sustainable closed loop dual channel supply chain with price, circular economic index and advertisement effort dependent demand

The number of production companies in the world is growing day by day, and they produce a huge amount of waste that harms the environment. Production companies look for various solutions to manage waste. Additionally, this produced waste can be reused in the remanufacturing process. In this regard, the governments of developed countries provide subsidies to manufacturer on returned products to encourage them to remanufacture. This work proposes a dual-channel closed-loop supply chain model in which products are produced for circuler economics. Dual channel refers to the combination of one direct online channel, where manufacturer sells new products to customers directly through his own E-marketplace with an E-ad platform and the traditional retail channel, where the retailer sells new products to customers offline after purchasing them from the manufacturer. Moreover, customers can resell the used products to the manufacturer's collection center for recycling products at an exchange price. The manufacturer will then remanufacture or rework the goods following inspection and sell them on the secondary market. This work provided a concise idea, supported by precise data (recorded by blockchain technology), about the circular economic index (CEI) of products to address the trust issues of consumers. The primary objective of this study is to maximize the profit of the supply chain while reusing substantial amounts of waste produced every day and conserving natural resources. Here, the return rate is considered linearly dependent on CEI, which helps the manufacturer make the environment sustainable and increases the profit of supply chain members by increasing demand and government subsidies. The proposed model is formulated mathematically, and both centralized and decentralized methods are used to solve the model. In the decentralized model, Stackelberg game theory approach is applied to solve the corresponding maximization problems. Also, the revenue-sharing contract policy is employed to achieve coordination between the retailer and manufacturer. Here, the numerical results indicate that the revenue-sharing contract model is more acceptable from each member's perspective. However, the total supply chain profit is slightly higher in the integrated model than in the contract model. Finally, through sensitivity analysis, we observe which key parameters are more effective for which variables or profitability.