Reverse Supply Chain Management Based on Recycling Remanufacturing

Considering the retailer's effort and the randomness of the recycling products quantity, we regard the cost saving of remanufacturing as an objective function to investigate a manufacturer how to take advantage of cost sharing contract to encourage its retailers' effort and achieve the coordination of the reverse supply chain ultimately. The research of the paper indicated that the profit rate achieved by the manufacturer is equalized to the ratio that they return to the retailer when the reverse supply chain is achieving coordination and the retailer's overall profit is always promoted. In addition, the manufacturer's profit is determined by the margin between the whole profit increase of the reverse supply chain system and the retailer's cost of decentralized decision. Finally, an example is illustrated to testify the conclusion and argued the possibility of Pareto improvement existing in the channel.