Price decision-making models in closed-loop supply chain based on government subsidies: a new replacement policy of household appliances in China

Considering closed-loop supply chain including single manufacture, single retailer and single logistics provider is established in this paper. First of all, price decision-making models of closed-loop supply chain are created based on different subsidies strategies from government which are NL model, LP model and LA model. By solving the models, it gets the optimal price decisions of all the enterprises in the closed-loop supply chain and studies on how some parameters such as unit product subsidy rate, unit product subsidy limit will affect the price decisions in LP model and LA model. Finally, a numerical example is designed to verify all the above propositions and it shows that the optimal price decisions in the sales channels of LP model is lower than LA model and the optimal price decisions in the recovery channels of LP model is higher than LA model.