Pricing and coordination with contract for the green supply chain of Chinese home appliances industry with retailer's promotional efforts

Abstract

This study focuses on the decision-making about the pricing issues for home appliances companies when recycling waste home appliances. We suppose three collection methods for the recycling of waste home appliances, i.e., manufacturer collection (Model M), retailer collection (Model R) and third-party collection (Model 3P). Considering the effect of retailer's promotional efforts and the effective recycle behaviour on the home appliances supply chain, game models are constructed respectively according to different collection methods. The optimal recycle prices for the waste home appliances and the optimal retailer's promotional efforts can be determined by these models. To improve the game effectiveness, revenue and expense-sharing contract models are designed in order that both the revenues and expenses related to the manufacturing, retailing, promotion and recycle operations in the green supply chain can be allocated among all participant players, thus the profits and effectiveness of the whole supply chain can be better improved. Lastly, all the pricing and contract models are successfully tested by using the green supply chain of Gree freon-free and inverter air-conditioner as a case.