Pricing Strategy of Closed-Loop Supply Chain Under Disruptions

The aim of this paper is to understand how disruptions effect on closed-loop supply chain, and how to achieve the coordination of closed-loop supply chain under disruptions situation for the whole supply chain system. Design /methodology/approach- This paper analyzed the effect caused by the disruptions of the closed-loop supply chain from both supply and demand, and applied the established margin profits sharing contract to achieve coordination under the disruptions. Findings-From both supply side and demand side, it drew how the disruptions affect the closed-loop supply chain. When the disruptions have less effect on the forward and reverse cost of closed-loop supply chain, the impact of the closed-loop supply chain is controllable; when the disruptions have lager effect on the forward and reverse cost of closed-loop supply chain, the impact of the closed-loop supply chain is uncontrollable. Research limitations/implications- In this paper, the contract costs are ignored for zero. While in actual situation, to maintain the efficient implementation of this contract must spend considerable cost. Sometimes the cost may be too high to become hinder between manufacturers and retailers. This paper also does not make in-depth study on this issue, so it will be further study in the future. Originality/value- This paper also designed a set of differential profit sharing contract based on revenue sharing contract mechanism. The contract is easy to be managed, easy to be operated, making the closedloop supply chain system can achieve coordination whether in steady state or under disruptions.