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Price Decision of Two Period Closed-loop Supply Chain with the Manufacturer’s Green Activities Program

Author(s): Han Xiu-ping, Chen Dong-yan, Chen De-hui

In this paper, price strategy of two period remanufacturing closed-loop supply chain is studied. Considering that manufacturers invest green activities program in the end of the first period, the optimal pricing and the optimal level of green activities of centralized and decentralized decision-making are obtained, and the revenue sharing contract of the coordination supply chain is given. The results show that, in order to sell more new products in the first period and ensure more remanufacturing products to increase their profits in the second period, manufacturers should reduce the price of new product. Under the cases of centralized and decentralized decision-making, the price of the new product in the first period will be decrease with the increase of the scale parameter, and the optimal level of green activities will increase with the increase of the scale parameter. But under decentralized decision-making, the member's profit of the supply chain increases with the increase of the scale parameter. Finally, a numerical example given demonstrates the above conclusion.

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