Price Strategy For Reverse Supply Chain Based On Game Theory

Along with great development of science and technology, people's living standard has been greatly increased. Consumers attached more and more importance on the diversified and personalized products, which resulted in shortening product life cycle, updating and substitution, leading to enormous disposal of used products. Under such circumstances, more and more entrepreneurs and scholars came to see the essence of reverse supply chain management. Adopting the ideas and methods of reverse supply chain management, enterprises can not only play a role in protecting the environment, but also promote its green image during the recycling and reconstruction process so as to increase customer value and competition.The reverse supply chains are value-increased chains. Actually, recycling is a process to resume the product value in forward supply chains. The key factor to increase value is to reduce the cost; therefore the pricing strategy for recycling in reverse supply chains is of great importance. Current surveys on pricing for reverse supply chains at home or abroad are largely based on uniform pricing for used products, while few surveys on its price-fixing are in accordance with qualities of the used products .This paper summarized the current situation on reverse supply chains, proposing a classified pricing strategy for used products in high recycling term and in low recycling term. The paper introduced the structure of the reverse supply chains and its recycling methods, and then made a series of assumptions based on the reality. In establishing the pricing models in non-cooperative game theory and cooperative game theory between manufacturers and retailers, the paper compared the efficiency of the two methods by analyzing data to encourage cooperation and properly profit distribution between the two parties, maximizing member profits and ensuring high benefits in this system.