Optimization for Reverse Supply Chain with IERs and Competition

Abstract

In reverse supply chain with IERs (Inspection Error Rates) and competition, which consists of one remanufacturer and two competing collectors, the two collectors collect the used-products from used-product market competitively, and then they carry out inspection activity with IERs. The competition means supply amount competition. Considering the competition, we study the optimal price decisions for reverse supply chain members by game theory. We present the optimal collecting prices for two collectors and the optimal reclaiming price for remanufacturer. By numerical example, we analyze the impacts of competitions on the optimal results under supply amount competition. The research results show that: under supply amount competition, when one collector reduces IERs, the other one can get small increasing of profits even though he does not reduce his IERs; the remanufacturer can get more profits.