The Coordination Of Closed-loop Supply Chain With Differential Price Under Disruption

With the deteriorated pollution situation, people are eager to find a way to develop in a sustainable manner. Then the Closed-loop Supply Chain (CLSC) attracts a lot of concern because the implementation of CLSC management can bring in good environment and economic benefits. The CLSC is more vulnerable in quickly changed external environment. How to deal with disruptions? How to reduce the loss cased by disruptions? How to make the CLSC recovery to normal operation rapidly after the system is influenced by the disruptions? These questions have drawn wide attention from enterprises and academic community both at home and abroad.The study of CLSC has made great progress, the emergence of a number of pricing and coordination models in the past few years. However, almost all of the models based on remaining in static manner and the price of remanufactured products is with no difference in case of new product. Therefore, there is always one way or another defect and there is a big gap between the theory and the operation of CLSC in practice. In this paper, we consider more realistic scenarios:there is difference between sales price of new product and remanufactured product. We analyzed the production strategy and coordination strategy by revenue-sharing contract in static manner and when disrupted by emergency separately. Besides, some numerical examples are given to illustrate the theoretical results.The study shows that:(1) Like the traditional supply chain, there is "double marginalization" in undisturbed CLSC, which can lead to bad performance and decreased profit. The results show that revenue-sharing contract can totally coordinate the CLSC and the revenue-sharing contract allows arbitrary splitting of the total profit of the CLSC.(2) When the market demand and the production cost disrupted, the original production plan have some robustness in centralized CLSC. The bonds of robustness are associated with extra production cost per unit and substitutability coefficient when market demand is disrupted and are associated with disposal cost per unit when production cost is disrupted.(3) When the disruption of at least one kind of product is largely, exceeds the bonds of robustness, the original production plan has to be revised to make sure the system obtain optimal profit.(4) In order to minimize the loss caused by the disruptions, it is necessary to respond positively and enhance collaboration between members of the system. The results show that it is always necessary to adjust the original contract when the production cost of at least one kind of product is disrupted largely. Besides, the improved revenue-sharing contract is also effective under static environment.I hope this paper’s study can help the enterprises to attach importance to disruption management and give manager some advice about how to deal with disruptions.