Abstract:In this paper, the closed-loop supply chain system with onesupplier, manufacturer and retailer is constructed under demand uncertainties.Considering the impacts of the government behaviors on return modes, theoptimal remanufacturing decision problems based on advanced recovery fee of theclosed-loop supply chain are researched. The optimal remanufacturability andoptimal wholesale price decided by the manufacturer are solved, as well as theoptimal retail price decided by the retailer. The comparisons between theadvanced recovery fee mechanism and extended producer responsibilitymechanism are made based on the total supply chain profits. Finally, numericalcalculations are carried out to validate theoretical analyses.

Key words: reverse logistics;remanufacturing; advanced recovery fee; extended producer responsibility;Stackelberg game

 1Introduction

Inrecent years, waste recycling issue of appliances and electronic products hasaroused great attention in developed countries and regions. To promote resourcerecycling and protecting the environment, many countries have adoptedlegislation to regulate, and through the development of waste appliances andelectronic products recycling fee mechanism to promote the waste appliances andelectronic products in the market-oriented and enterprise operation, in orderto achieve efficient, pollution-free resources for the purpose of the use ofwaste.

Throughout theresponsibility of national e-waste recycling model, mainly divided into twokinds of commitment, that is consumers commitment and producers commitment. Forexample, Sweden, Germany and other EU countries and China's Taiwan region areimplementing an Extended Producer Responsibility mechanism (EPR).Under EPR mechanism, each manufacturer should assume the product recovery,recycling or final disposal costs when the product launch in the market. But InJapan, the United States and other countries have adopted an Advanced RecoveryFee mechanism (ARF). In this case, consumers must pay a recycling fee for thecollection of waste products, transportation, recycling chain managementexpenses as well as the re-use of subsidies to producers when they buy new electronicproducts.