Abstract:

Based on  game theory, the differential price coordination mechanism of the  closedloop supply chain composed of one manufacturer and one retailer was studied. The results showed, that  coordination can be achieved under symmetric product cost information by setting a profit sharing coordination policy. Under asymmetric product cost information, if exogenous parameters satisfy some certain condition, only the abovementioned coordination policy can achieve the supply chain coordination. Otherwise, the retailer can set profit sharing proportion as the function of the manufacturers announced cost. This strategy can make the closedloop supply chain coordinative.

Key words: asymmetric iinformation; closedloop supply chain; differential pricing; coordination mechanism