Recycling and Pricing Coordination of Closed-Loop Supply-Chain with Hybrid Channels

Abstract

Abstract: A closed-loop supply chain with selling and recycling through hybrid channels is discussed in this paper. For such a supply chain, there are three hybrid used product recollecting modes: 1) recollection by both manufacturers and retailers; 2) recollection by both manufacturers and a third party; and 3) recollection by both retailers and a third party. Game theoretic models for pricing decision are developed for different recollecting modes under centralized and decentralized decision-making, respectively. With these models, the advantage and disadvantage of different recycling modes are analyzed. Then, the closed-loop supply chain coordination problems with different recycling modes are discussed by using a two-part pricing contract. An example is given to show the influence of different modes on the supply chain profit. Result shows that there is a recycling price differential sensitivity threshold, and Modes 1) and 2) are the best choice when the sensitivity of recycling price is greater than the critical value. Otherwise, Mode 3) is the entrusted one. Also, chain coordination in dispersion decisions can be realized by two-part pricing contract. 

Key words: closed-loop supply chain, recycling mode, pricing coordination, game theory

Li Wei1, Kong Zao-jie1, Xiao Mei-dan2. Recycling and Pricing Coordination of Closed-Loop Supply-Chain with Hybrid Channels[J]. Industrial Engineering Journal , 2013, 16(5): 45-52.

References

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