Study On Closed-loop Supply Chain Price Decision With Remanufacturing From The Perspective Of Market Structure

Strong economic development requires a steady flow of resources input which brings about theconsiderable economic benefits as well as enormous pressure on environmental protection. Todaythis phenomenon is certain to arouse people’s thinking, especially in a situation that resources arebecoming increasingly scarce, that the extensive economic development mode is facing more andmore obstacles. The transformation&upgrade of the economic development are inevitable whichput forward more expectations and requirements to the recycling of resources. After beingpropounded, the closed-loop supply chain theory has received widespread attention and expectationfrom the government, scholars and business communities. Some countries even have issued somerelevant legislation to force the enterprises to develop the closed-loop supply chain and recycle theproducts completing the entire life cycle for remanufacturing. Many famous enterprises have startedthe remanufacturing project of waste products. The implementation of this project not only savesproduction cost but also won the environment-friendly reputation for the enterprises.Based on the combination of the game theory, economics, management and mathematics, thispaper researches the pricing issues in the closed-loop supply chain. From two perspectives ofdifferent market structures, the market consisting of competing manufacturers and monopolyretailer and the market consisting of monopoly manufacturer and competing retailers, this paperalso analyzes the price-decision issues in three different circumstances——cooperative game，Stackelberg game with manufacturer as its leader, Stackelberg game with retailer as itsleader——and evaluate the differences of the optimal price and total profit of the system in eachgame through comparing the three price-decision sets. Before the modeling, some relatedhypotheses confirming to the economic logic should be put forward to simplify the researchedproblems. After the modeling, this paper verifies the conclusion of the parameter model with anumerical example and analyze the sensitivity of some parameters in the model.Finally we achieve the research conclusion with basic consistency that either in the marketconsisting of competing manufacturers and monopoly retailer or the market consisting of monopolymanufacturer and competing retailers, cooperative game, being able to avoid the double marginaleffect, is more efficient than the other two games. In the condition of cooperative game, the retailprices will be much higher and the retailers will pay more for recycling of the waste products forconsumers. In the end, the number of recycling waste products will be the biggest. Also theconclusion indicates that in the condition of cooperative game, the total profit of the system is much more than in the other two kinds of circumstances. The results of simulation show thatremanufacturing costs, consumer awareness, as well as government subsidies has a certain effect onpricing decisions and profit of the whole closed-loop supply chain system. It’s obvious thatremanufacturing costs has the greatest impact on those.