Abstract: Based on the impact of product return rate and product differentiation on consumer purchasing behavior, this study constructs a green closed-loop supply chain model consisting of a manufacturer and a retailer, and studies product manufacturing/remanufacturing and marketing strategies, where the manufacturer produces new and remanufactured products, sells new products to the retailer, and sells remanufactured products directly to consumers. The retailer sells new products and returns any returned products to the manufacturer. The results of solving and analyzing the game model show that an increase in the unit return processing cost and return rate can reduce the profits of the manufacturer and retailer. When the unit return processing cost is low, the manufacturer chooses to remanufacture part of the waste product; otherwise, the manufacturer remanufactures all the waste products. This study further examines an extended model that introduces sales effort. The numerical experiment shows that the introduction of sales effort can increase the profits of the manufacturer and retailer, and that the manufacturer is willing to undertake more sales effort costs with higher return rates.

Key words: closed-loop supply chain, remanufacturing, return rate, pricing strategy; Stackelberg game