Coordination Model for Closed-Loop Supply Chain with Product Recycling

The coordination of closed-loop supply chain with product recycling in stochastic demand is studied.Two recycling channels covering both manufactures and sellers are considered to develop a Stackelberg game model for closed-loop supply chain where the manufacturers and sellers play the roles of leader and follower,respectively.The Stackelberg equilibrium game is proposed on a basis of decentralized decision which is discussed in relation to centralized decision.The possibility of the existence of a coordinative strategy is also discussed for closed-loop supply chain.A simulation was therefore carried out for the recycling of household electrical appliances as junk.The result showed that a two-part tariff contract signed by both parties can simply make the closed-loop supply chain coordinative so as to ensure that both manufacturers and sellers in the supply chain gain their own rational profits.