Central European Journal of Operations Research manuscript No. (will be inserted by the editor) Design of the contract parameter in a a closed-loop supply chain Imre Dobos · Barbara Gobsch · Nadezhda Pakhomova · Grigory Pishchulov · Knut Richter Received: date / Accepted: date Abstract We study an extended joint economic lot size problem which incorporates the return flow of remanufacturable used products. The supply chain under considera- tion consists of a single supplier and a single buyer. The buyer orders a single product from the supplier, uses it for her own needs, and collects the remanufacturable items after use. The ordered items are shipped from the supplier to the buyer in the lot-for- lot fashion by a vehicle which also returns the collected used items from the buyer to the supplier for remanufacturing and subsequent service of the buyer’s demand in the next order cycle. For satisfying the total demand, the supplier manufactures new items or remanufactures used ones received from the buyer. For given demand, productivity, collection rate, disposal cost, setup cost, order cost, holding cost for serviceable and nonserviceable products at the supplier as well as the buyer the lot size (order size) for the supplier (buyer) has to be found which minimizes the total cost. Furthermore, we address a decentralised decision making of the parties under a two-part tariff and determine their equilibrium strategies within the Nash framework. Imre Dobos gratefully acknowledges the financial supports by the T ´ AMOP-4.2.1.B-09/KMR-2010-0005 research program and the Deutscher Akademischer Austauschdienst (DAAD). Imre Dobos Corvinus University of Budapest, Institute of Business Economics, H-1093 Budapest, F¨ ov´ am t´ er 8., Hun- gary, E-mail: imre.dobos@uni-corvinus.hu Barbara Gobsch European University Viadrina, Faculty of Business Administration and Economics, Frankfurt (Oder), Ger- many, E-mail: gobsch@europa-uni.de Nadezhda Pakhomova St. Petersburg State University, Faculty of Economics, Russia, E-mail: pakhomova@europa-uni.de Grigory Pishchulov European University Viadrina, Faculty of Business Administration and Economics, Frankfurt (Oder), Ger- many, E-mail: pishchulov@europa-uni.de Knut Richter European University Viadrina, Faculty of Business Administration and Economics, Frankfurt (Oder), Ger- many & St. Petersburg State University, Faculty of Economics, Russia, E-mail: richter@europa-uni.de