Pricing in a dual channel closed-loop supply chain: A game theory approach

In this paper the pricing of reverse products in a two-level closed-loop supply chain is considered and a game theory approach is used to solve it. Pricing is a sensitive and vital issue for businesses. In the market of reverse products, this issue will be much more difficult and complex due to difficulties associated with collecting and re-manufacturing processes. On the other hand, the use of the internet and direct channels for collecting products from customers alongside traditional retailers is an important issue that requires management and coordination. The proposed price for buying second-hand and defective products from customers should be high enough to convince them that returning the products has more benefits than discarding or keeping them at home. At the same time, the price should be low enough to make it economically viable for producers to carry out the repair and re-manufacturing operations and resell them in the direct supply chain for the producer. The use of game theory, where the decisions of one player affect the decisions and outcomes of other players as well as their outcomes, is a suitable method for solving the problem of pricing reverse products in a two-level closed-loop supply chain