Research on contract coordination and price decision of closed-loop supply chain under disruption condition

Abstract

In the course of remanufacturing closed-loop supply chain system in the actual operation, the disrupt event is inevitable, the closed-loop supply chain system how to coordinate events effectively become a hotspot of research. At present, revenue-sharing contract as a coordination mechanism is used widely, and it more to achieve the various members of the closed-loop supply chain profit sharing and risk sharing. Therefore, revenue-sharing contract to coordinate response to disrupt events is considered. To study a closed-loop supply chain system with single manufacturer and single retailer is established under the demand is unlinear function. When market scale, reproduction cost and collection cost are disrupted simultaneously, a Stackelberg game model is established. The optimal strategies of closed-loop supply chain under the centralized decision and decentralized decision are analyzed. Research result showed that the closed-loop supply chain coordination may be broken off by original revenue-sharing contract under a disruption event. The market disruptions exceeded a certain range when disruption even was happened, the original production plan is adjusted and the new revenue-sharing contract should be designed to coordinate the closed-loop supply chain. Finally, a numerical example is given to the conclusions efficiency. ©2013 Journal of Mechanical Engineering.