The Research on 4PL Optimal Pricing Strategy Based on the Reverse Logistics Integration

An effective reverse logistic integration is used as an important competitive policy in the marketplace to substantially influence product sales. The purpose of this paper is to propose the use of a fourth party logistics (4PL) as a return service provider, and develops optimal decision policies for both the seller and the 4PL. A profit-maximization model is presented to jointly obtain optimal policies for the seller and the 4PL through the use of Stackelberg like game theory, where the seller acts as the leader and the 4PL acts as the follower. This paper offers a number of managerial guidelines for using marketing and operational strategy variables to influence the market reaction parameters so as to obtain the maximum benefit from the market.