ISSN: 2226-3624
Open access
Purpose: This paper investigates the interaction between a manufacturer’s extended warranty design and the choice of closed-loop supply chain (CLSC) and circular economy supply chain (CESC) structures for the collection of used products. Design/methodology/approach: We consider two CLSC formats and one CESC format, modeling the resulting three combinational scenarios as decentralized decision-making systems with the manufacturer as the Stackelberg leader. Findings: Our results show that, when the manufacturer provides extended warranty services, assigning product recycling responsibility to the retailer leads to the highest profits for the manufacturer, the retailer, and the entire supply chain. Research limitations/implications: The study focuses on specific CLSC and CESC structures; future research could extend the model to other supply chain configurations and market conditions. Practical implications: The findings provide guidance for manufacturers and retailers on designing extended warranty services and choosing supply chain structures to maximize overall profit. Originality/value: This study highlights the combined effect of extended warranties and supply chain structure choice on performance, offering new insights for both closed-loop and circular economy supply chain management.
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