Research On Pricing Strategy Of Dual-channel Closed-loop Supply Chain Under Cap-and-Trade Regulation

Nowadays,because of the increasing awareness of environmental protection,more and more enterprises begin to take various measures to participate in environmental protection.For instance,Hewlett-Packard,Apple and Weichai have begun to invest in remanufacturing and low-carbon production,and strive to build their own green closed-loop supply chain.Meanwhile,China has started the construction of the national carbon market.For the manufacturer,how to make profits under the cap-and-trade regulation and achieve goals of emission reduction is an important decision-making problem.On the other hand,in order to promote the development of remanufacture,the government proposed a subsidy policy for remanufactured products.How does the government subsidies will affect the closed-loop supply chain is also worth exploring.This paper builds a dual-channel closed-loop supply chain consisting of a retailer and a manufacturer under cap-and-trade regulation.We suppose that consumers have different willingness to pay for new products and remanufactured products,then we divide consumers in the market into two types: primary consumer and replacement consumer.First,we establish a basic model for a dual-channel closed-loop supply chain with cap-and-trade regulation.The results show that when consumers prefer to buy new products,the relatively low price of remanufactured product is not profitable to the manufacturer.In addition,the numerical analysis shows that the profits of manufacturer and retailer decrease in carbon price.On the other hand,owing to more and more enterprises start investing in emission reduction,we expand the base model to explore the impact of emission reduction investment on optimal decisions.We assume that the manufacturer can invest in emission reduction.The results show that manufacturer’s investment in emission reduction is profitable to manufacturer and it is harmless to retailer.The numerical analysis shows that the emission reduction level decreases in the cost coefficient of emission reduction,but the total emission increases in the cost coefficient.In addition,the profits of manufacturer and retailer decrease in the cost coefficient of emission reduction,and manufacturer should rationally invest in emission reduction to maximize revenue.Finally,we introduce the government’s “trade-old-for-remanufactured” subsidy into the basic model,and we assume that the government subsidies consumers who replace remanufactured product with old product.We find that the “trade-old-for-remanufactured” subsidy can increase the demand of remanufactured product and profit of manufacturer.However,the subsidy reduces the demand of new product.Moreover,the numerical analysis shows that the subsidy damages the profit of retailer,the profit of retailer decreases in the “trade-old-for-remanufactured” subsidy.