Pricing Decision and Performance Analysis of Closed-Loop Supply Chain with Third-Party Reverse Logistics

Apply game theory to develop the models of a closed-loop supply chain system with single manufacturer, retailer and single third party collecting the used products. This paper focuses on analyzing the optimal price and profit of the member enterprises in decentralized structure. In addition, we also evaluate the performance of the member enterprises and the whole system compared with the traditional supply chain. The results show that the sale price and the wholesale price in the closed-loop supply chain are lower than those in traditional supply chain, and the profits of member enterprises and the whole system are higher than ever. The result also shows that decreasing remanufacturing cost is useful for improving the performance of closed-loop supply chain. The smaller the remanufacturing cost, the higher the profits of member enterprises and the whole system.