Price Decision in a Custom-made Product Supply Chain with Remanufacturing

In this paper, we consider reverse supply chain and traditional supply chain synchronously, combining mass customization with recovering of old products. A custom-made production can be divided into two stages. The first stage is common parts production and the second stage is individual production. We make process as nonlinear bilevel programming problem by two cases: manufacturer callback and retailer callback. Firstly, we study a supply chain with one manufacturer and one retailer, then extend these models with n competing retailers. Solving these problems, we can get optimal wholesale prices , retail prices, callback rate and exchange prices of callback product made the profit of retailers and manufacturer maximize. We analyze and compare two cases and extended model through numerical example. We find that increasing the rate of recovery and introduction of competition are good ideas to improve profit.