Study On Closed-loop Supply Chain Coordination With Two-part Tariff Contract Under Disruptions

Closed-loop supply chain is a new mode of supply chain management, which consists the whole process of product flow, such as purchases, machining, sell and recycling of uesd products. Closed-loop supply chain can save production cost and achieve the recycling of products. And closed-loop supply chain is approved and used more and more widely, such as Hewlett-Packard and Xerox.Because the supply chain members always consider their own profits as the goal, double marginalization will be caused in the closed-loop supply chain management, which makes the total profit under the decentralized decision-making will not reach the level that under the centralized decision-making. It is a problem to be solved that contract can be used to coordinate the closed-loop supply chain under the decentralized decision-making in order to improve the operational performance. But the closed-loop supply chain will not be always in relatively stable environment. The happening of disruption, such as natural disaster, production accidents, and so on, will disturb the closed-loop supply chain in well-function. Therefore, it is very important to design a contract that can coordinate the closed-loop supply chain both in the stable environment and under disruption.The content of this paper consists several aspects, as follows:Firstly, it introduces the research background and the related research of the closed-loop supply chain management that includes the concept and structure of the closed-loop supply chain, contract coordination and disruption management.Secondly, this paper studies the coordination both in state environment and under disruptions of a closed-loop supply chain composed of one manufacturer and one retailer who is engaged in the collection of used products. And it expands the model to the closed-loop supply chain composed of one manufacturer and two competitive retailers. It designs a two-part tariff contract to coordinate the decentralized closed-loop supply chain in state environment. Using the K-T condition, an optimal response strategy for the centralized closed-loop supply chain is given under demand disruptions caused by an emergent event. The analysis shows that the coordination of the decentralized closed-loop supply chain with the original contact will be broken off by an emergent event. So an improved two-part tariff contract is put forward to coordinate the closed-loop supply chain under disruptions.Thirdly, this paper designs examples respectively to analyze the change of optimal products supply, optimal recovery ratio and profits of the two closed-loop supply chains under demand disruptions caused by an emergent event. Moreover, it compares the profits of retailer under both situations of adjusting and not adjusting the optimal products supply and recovery ratio. The result shows that the optimal products supply, optimal recovery ratio and profits of the two closed-loop supply chains increase with demand. If the demand changes largely, the retailers should adjust the optimal products supply and optimal recovery ratio in time, which can improve the profits of retailers. If the demand changes a little, the retailers need not to adjust the optimal products supply and optimal recovery ratio. They only should improve their price to ensure their profits will not decline.At last, this paper summarizes the full text and puts forward the further research.