Strategic information sharing in the dual-channel closed loop supply chain with nonlinear production cost

This paper explores the strategy of information sharing within a closed loop supply chain comprising three echelons and dual channels. By considering the supplier’s collecting activities and the two formats of nonlinear production costs (i.e., production diseconomy and production economy) faced by the manufacturer, we construct and utilize game-theoretic models to determine the optimal strategy (i.e., no sharing, sharing information solely with the manufacturer, sharing with the supplier, and sharing with both the manufacturer and supplier) for information sharing by the retailer. The findings indicate that the retailer's inclination to voluntarily share information and the most effective approach are significantly influenced by the interplay between the supplier's recycling efficiency and the manufacturer's nonlinear production cost. Specifically, in the context of production diseconomy, it is commonly observed that the retailer can derive advantages by engaging in information sharing with a supplier who possesses a high recycling efficiency. In contract, the retailer would share the information when the recycling efficiency is high or the production economy coefficient is large. Otherwise, no sharing strategy can be considered as the optimal choice. Ultimately, the study aims to assess the effects of various approaches to sharing information on the remaining participants within the supply chain.