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J4  2012, Vol. 9 Issue (4): 594-    DOI:
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Reverse-supply Chain Pricing Strategy Based on Contract Theory
 KONG Ling-Cheng, LUO Tang-Jie
1. University of Science & Technology of East China, Shanghai, China; 2. TNTHOAU, Shanghai, China

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Abstract  

There are three types of recovery mode because of extended producer responsibility, which are producer recovery, outsourcing and joint recovery. Recovery by producers assisted by retailers is a typical, effective outsourcing recovery mode. In this paper, we focus on how to determine the optimal buyback prices of recycled products with different quality in the “manufacturer  retailer” twolevel supply chain, in order to allow manufacturers, retailers and supply chain to maximize their profits. To do that, we use the contract theory, draw on a similar assumption of buyback contracts and assume there are three types of quality degree of recyclable products in the closedLoop supply chain, and there is only one manufacturer and a retailer and the retailer has been in charge of recycling products sold. The results show that by adjusting the parameter values, no matter the recovery probability is random or not, circumstances of the supply chain coordination can be achieved. We also can find the optimal order volume and recovery price. And we also see that the optimal retail price is closely related to the optimal order quantity, the manufacturer's optimal price does not affect the overall supply chain profit.

Key wordsreverse-supply chain      remanufacture      contract;pricing     
Received: 20 April 2010     
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KONG Ling-Cheng
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KONG Ling-Cheng,LUO Tang-Jie. Reverse-supply Chain Pricing Strategy Based on Contract Theory[J]. J4, 2012, 9(4): 594-.
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http://manu68.magtech.com.cn/Jwk_glxb/EN/     OR     http://manu68.magtech.com.cn/Jwk_glxb/EN/Y2012/V9/I4/594
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