Discounting strategies' effects on a closed-loop dual-channel environmentally friendly supply chain of complementary products under sales effort

The relevance and impact of the internet are growing in every aspect of daily life, particularly in business which has the potential to address a lot of issues and transform many conventional techniques and procedures, including distribution. Many manufacturers have expanded their traditional retail channels to include a channel to trade the products to consumers exclusively. This paper investigates the pricing decision and the effect of discounting in a dual-channel closed-loop supply chain with two green complementary products by exploring the market demand is linearly correlated with the product selling prices, sales effort level and green innovation level. Here, four different models are analysed analytically under a game-theoretic methodology and then validated the findings using a numerical example. Additionally, the sensitivity analysis is performed to investigate the impacts of a few significant critical parameters on the supply chain participants. The findings of the article demonstrate how environmentally and economically advantageous green innovation can raise profits throughout the supply chain. Also, it is worth noting that sales efforts contribute to an increase in supply chain profit. Moreover, the discounts policy proves to be more profitable when the discount rate surpasses a specific threshold.