A Closed-Loop Supply Chain under Retail Price and Quality Dependent Demand with Remanufacturing and Refurbishing

The demand of a product is linearly dependent on the retail price and quality of the product. We address a closed-loop supply chain where the manufacturer manufactures products according to the demand and sells them through a retailer in the market. A third party collects the used products from costumers and sends to the manufacturer to increase the quality. If the products can retrieve the original quality, thus the process is called remanufacturing. Not every products can retrieve the original quality, thus manufacturer refurbish this products with lower price. We construct four different scenarios - centralized and decentralized led by manufacturer, retailer, and third party. From the comparison of the result obtained in the numerical example, we conclude that the joint profit obtained under centralized, manufacturer-led, and retailer-led policies is higher than third party-led policy.