Decision models of Multi Periods Closed Loop Supply Chain with Remanufacturing under Centralized and Decentralized Decision Making

Abstract

Abstract. The closed-loop supply chains for new products and remanufactured products under uncertain demand are studied. Considering the differences in consumers' "willingness to pay (WTP)" for new products and remanufactured products, the decision models of multi-period closed-up supply chain with remanufacturing under centralized and decentralized decision making are established respectively and optimal decision of each member of the supply chain is obtained. Through comparison between differences in the consumers' WTP for the two types of products, three closed-loop supply chains are established under the condition of the government's reward and punishment mechanism. The game model and numerical experiment dominated by various manufacturers are elaborately analyzed, the interest coordination mechanism is confirmed with Shapley Value Method, and the model is solved and dissected through numerical simulation. The research results show there is benefit loss under decentralized decision making, and a reduction of middlemen can effectively improve benefits of the supply chain. The benefits of closed-loop supply chain with remanufacturing can be distributed with Shapley Value in a rational and effective manner.