Moral hazard analysis of adverse supply chain based uncertain recycle quality

The recycle model of reverse supply chain, which is suitable to Chinese national condition, is the flow of individual commerce wandering about the streets and their family workshop recycle patterns. Considering to uncertainty recycle quality, firstly, the paper analyses the business profit functions of manufacturer, retailer and recycler under the balanced wholesale prices and retail price. Secondly, recycler has more information about recycle quality, and manufacturer provides the corresponding recycling price through evaluating the waster quality, which is imperfective information as the principal role. So the paper constructs the moral hazard model of reverse supply chain under the uncertain recycling quality. Finally, it gets the optimal recycling schemes under certain theoretical restricted condition, and puts forward measures to overcome moral hazard problem of reverse supply chain.