Government Mechanisms in Closed-loop Supply Chain considering Retailer’s Dual-channel Structure

Abstract

In order to analyze how different government mechanisms affect decisions in closed-loop supply chain with retailers' dual-channel structure, three game models were established. The result showed that when the government adopts the reward-penalty mechanism, too small reward-penalty parameter cannot achieve effective supervision and motivation; When the government adopts the processing fund mechanism, members’ profits decrease in the forward supply chain while increase in the reverse supply chain; The reward-penalty mechanism has no effect on the product’s price, but the processing fund mechanism will increase the product’s price. What’s more, the profit of members in the forward supply chain under reward-penalty mechanism is always better when compared with the processing fund mechanism. While in the reverse supply chain, the profit of members depends on the relative value of government's subsidy and reward-penalty parameter.