Pricing and Recycling Decisions in a Closed-Loop Supply Chain with Self-recycling by the Cosmetic Brand Owner

To investigate the pricing and recycling decisions of supply chain members when the cosmetic brand owner conducts self-recycling, we consider a closed-loop supply chain consisting of a cosmetic brand owner and a retailer. We first derive the optimal decisions of the supply chain members using the backward induction. Then, we conduct the sensitivity analysis on some critical parameters and compare the brand owner’s and the retailer’s pricing decisions as well as the market demand for their products. The results show that the cost of production and the cost-saving of the cosmetic brand owner through recycling are related to the decision making of supply chain members. Based on the above study, we provide theoretical support for the cosmetic supply chain members to make more appropriate and profitable decisions.