On consumer preferences´ impacting on the pricing policies of the closed-loop supply chain with market segmentation

This paper addresses the optimization of the new and remanufactured products coordination and pricing decision for the closed-loop supply chain which is composed of a manufacturer/remanufacturer, a distributor and a third-party recycler. Firstly, the market demands of new and remanufactured products are determind by the consumers´ preference coefficient to the remanufactured products. It is deived that the consumers are willing to buy remanufactured products only when the price of a remanufactured product remains below the result of the price of the new one multiplying the consumers´ preference coefficient. Then, based on Stackelberg game, the mathematical model representing the sales pricing policies of the new and remanufactured products and recycling rate of the used products in the closed-loop supply chain is proposed. The optimal decisions of the partners in the closed-loop supply chain are derived. Through analyzing, it is deduced that marketing the remanufactured products increases the profit of every partner so as to enhance the total revenue of the closed-loop supply chain although it reduces the marketing the new products.