Closed-loop Supply Chain Coordination And Inventory Model With Risk Aversion Retailer

With the strengthening of environmental protection consciousness and strongattention to saving natural resources, governments have developed many legalmeasures to requiring enterprises attach importance on the recycling of usedmaterials. Realizing the significant benefits of sustainable development, it isespecially important for enterprise to recycling items. On the one hand,enterprises found that remanufacturing of waste products will reduce productioncosts、 increase the economic benefit, and impact external image of theenterprise indirectly; on the other hand, remanufacturing can also play a role inprotecting the environment,and response to the call of the government. It willrealize the win-win situation of environmental and economic benefits.This paper applies game theory to study the closed-loop supply chain which iscomposed of a risk-neutral manufacturer and a risk aversion retailer whendemand is uncertain. Then, it presents a revenue-and-expense sharing contractto keep balance of the supply chain. The main is:1)inventory system of shortenthe order delivery time considering agent with risk aversion;2) closed-loopsupply chain coordination model with risk aversion retailer.Finally, it studies how risk aversion influences the pricing and profit of eachmember in the supply chain by using numerical emulation, and also acquiressome important management implications:(1) the more conservative marketbehavior vendors, the lower selling price.(2) if retailer is not will conservativerisk transfer and their behavior will only make their interests damaged.(3) themanufacturer will not act as vendors increases the degree of conservation tomake their profits reduced, but manufacture’s profit will increase.