Abstract:

A three-echelon reverse supply chain consisted of a collector, a remanufacturer and a retailer was considered, in which the remanufacturer is a leader who hires the collector to acquire used products, and resells the remanufactured products through the retailer. The optimal decisions of collection and selling prices were derived for the pure decentralized system, the coalition of the remanufacturer and the retailer, the coalition of the collector and the remanufacturer, and the centralized system. The parameter sensitivity was also analyzed, and the double marginalization manifested as lower collection prices and higher selling prices, which was more prominent when the decentralization was higher. Finally, contract schemes were developed to coordinate the three-echelon reverse supply chain.

Key words: reverse logistics, collection price, remanufacturing, coordination scheme, game theory, double marginalization