Joint-advertising for collection of returned products in a closed-loop supply chain under uncertain environment

- Impact of sharing or of not sharing advertising cost on the total profit.
- Centralized case performs better than the other cases under cost sharing.
- Advertising provides positive economic and environmental benefits.
- Used-product collection and channel profit in CLSC are increased by advertising.

Advertising plays an important role in contributing to the supply of returned items and market expansion. In this paper, advertising is considered as a means to entice consumers to return used-items in a remanufacturing environment. We investigate the impact of sharing or of not sharing advertisement cost on the total profit gained and the quantity of used-items acquired under the uncertain demand of remanufactured/new products and uncertain returns. For analysis, we develop mathematical models for the following closed-loop supply chain configurations: (i) advertising by manufacturer with cost-sharing, (ii) advertising by retailer with cost-sharing, (iii) individual advertising with cost-sharing, (iv) centralized advertising, and finally, (v) advertising without cost-sharing. These models have been illustrated through a numerical study, and the results reveal that the closed-loop supply chain model with “centralized advertising configuration” performs better over other models, and also, that advertising provides positive economic and environmental benefits.