Pricing dynamics in trade-in-enabled closed-loop supply chains under predetermined acquisition costs

Closed-loop supply chains (CLSC) have become pivotal in advancing sustainability within industries by encompassing the entire lifecycle of products, from production to recycling or remanufacturing. This study examines the role of trade-in programs in CLSC, where customers are incentivized to return used products in exchange for value. These programs are vital for minimizing waste and reducing production costs while enhancing corporate sustainability initiatives. However, challenges persist, particularly in setting optimal pricing strategies for remanufactured products. The study contributes to highlighting the critical role of acquisition cost, i.e., payments made to customers for returning products, influencing the demand and profitability of trade-in programs. A numerical and sensitivity analysis is conducted to explore the impact of varying acquisition costs on overall supply chain performance. The findings offer valuable insights for industries aiming to balance economic viability with environmental responsibility.