Remanufacturing Closed Loop Supply Chain Pricing And Coordination Strategy Study

People’s awareness of energy saving is improving, and environmental protection requirements of the enterprises is also rising. Remanufacturing on one hand can re-use of resources, reduce production costs, on the other hand enterprises can establish more responsible corporate images to enhance the competitive power. Thus, many companies try to implement remanufacturing strategy, but being faced with a series of challenges and problems, such as pricing new products and remanufactured products, coordinating closed loop supply chain as well as distributing profits and so on.This paper selects an internationally renowned auto parts manufacturing company B as a research background, based on the implementation of eXchange remanufacturing project of the company to study and discuss the pricing and coordination of its remanufacturing closed loop supply chain. In the remanufacturing closed loop supply chain, company B and its retailer both are separate economic entity, pricing decisions are often scattered, both to maximize their own interests respectively, resulting in double marginalization effect, which reduces the closed loop supply chain profits. In order to improve the company B’s, retailer’s and the supply chain system’s profit, it is necessary to take effective contract to coordinate the interests of company B and retailer to improve overall profit and achieve win-win situation.Firstly, this paper combines company B remanufacturing loop supply chain status with some scholars’ pricing theory to establish differential pricing model, to study pricing strategies under the decentralized decision-making and centralized decision-making respectively. Take electromagnetic injector for example, calculates company B’s, retailer’s and remanufacturing closed loop supply chain system’s optimal pricing and maximum profit, and compares company B’s and retailer’s profits, find that the current total profit of company B’s, retailer’s and the supply chain system’s profit higher than profit of decentralized decision-making, but still lost profits, and the loss of efficiency rate reached double digits, so the remanufacturing closed loop supply chain coordination is necessary.Subsequently, introduces an improved contract franchise fees, which retailers signed a contract with Company B, Company B agreed to reduce the wholesale price of the new electromagnetic injectors and remanufacturing electromagnetic injector, and increase the recycling prices of waste electromagnetic injector, at the end of one sales cycle, company B collect franchise fees from retailer which was agreed. The contract can effectively enhance the remanufacturing closed loop supply chain system profits, but the company B’s new electromagnetic injector’s unit profit declined greatly which increases the financial pressure on the company B in one sales cycle. Finally, analyzes the relevant parameters and finds that reduce the forward sale profit margin of retailer can ease the financial pressure of company in one sales cycle. Therefore, a reasonable forward sale profit margin can be set so that the distribution of profits more in line with Company B’s capital requirements after the implementation of the contract, and by numerical examples show the conclusion.