Apparel is one of the most important sectors of economy in and has been rapidly changing alongside the development of rental and sharing service. Rental has also been recognized as an solution to the critical sustainability problem in apparel supply chain. In this thesis, we develop a theoretical game model with centralized structure and decentralized structure to investigate the profitability and sustainability problem in apparel supply chain with both retail and rental. Under a centralized structure, we derive the close form solutions of decision variables and conditions for the existence of the hybrid model. Our Results show that the with rental, durability plays multiple roles in supply chain. The difference in consumers’ utility between rental and retail can also impact the...[ Read more ]

Apparel is one of the most important sectors of economy in and has been rapidly changing alongside the development of rental and sharing service. Rental has also been recognized as an solution to the critical sustainability problem in apparel supply chain. In this thesis, we develop a theoretical game model with centralized structure and decentralized structure to investigate the profitability and sustainability problem in apparel supply chain with both retail and rental. Under a centralized structure, we derive the close form solutions of decision variables and conditions for the existence of the hybrid model. Our Results show that the with rental, durability plays multiple roles in supply chain. The difference in consumers’ utility between rental and retail can also impact the profitability of rental and retail business. We also find that manufacturer will not always produce more durable products with the existence of rental. Under a decentralized structure, we derive the close form expression of decision variables and we find that fashion quality has inverse impact on the optimal durability quality. Future research opportunities are discussed.