Abstract: A closed-loop supply chain with retailer as leader is addressed in this paper. For such a supply chain, there is asymmetry for information about the manufacturers’ re-manufacturing cost. Game models are developed for analysis of operation and coordination mechanism of the supply chain under both symmetric information and asymmetric information. With the models, comparative study is conducted. Results reveal that retailers can achieve the purpose of collaboration and access to excess profits by providing franchise fee under both asymmetric and symmetric information. Under asymmetric information, manufacturers who are able to save large part of cost by remanufacturing have the information advantages and can gain high profits. Also, in this case, through coordination, a manufacturer can achieve the same retail price, the recovery rate, and total profit as that obtained under symmetric information. Examples are used to verify the proposed method.

Key words: asymmetric information, closed-loop supply chain, coordination mechanism, game theory