A supply chain model considering downstream returns remanufacturing and pricing decision

In this paper we develop a supply chain model consisting of a supplier and a manufacturer. The manufacturer faces a stochastic and price-sensitive demand, orders a component from the supplier to manufacture new products, and also remanufactures the product returns with a stochastic quantity. The supplier chooses the wholesale price of the component, using his foresight on the manufacturer´s response. We analyze the supply chain model under the wholesale price contract, obtain the analytic solution of manufacturer´s selling price, order quantity and remanufacturing quantity. The supplier´s decision is studied by numerical experiments and the influence of parameters is further studied.