Optimal pricing decisions for closed-loop supply chain with different disposal responsibilities

Abstract

This paper studies the optimal pricing decisions with three players e.g. the OEM, government, and the customers, when considering different disposal responsibilities in a closed-loop supply chain. For OEM, we propose the equilibrium price of new products when OEM faces different regulations of trade-in subsidy from the government respectively. Some factors such as discount of customer residual valuation for used products and proportion of the trade-in subsidy undertaken by the firm which influence the equilibrium price are also discussed in this paper. Finally, based on the equilibrium price of new products in different circumstances, we also make a further discussion to get more meaningful managerial insights.