Abstract: Under stochastic market demands,returns policy is presented in single-perio d and o ne-product reverse supply chain.The optimization conditions and optimal ordering quantities are derived for profit maximization on the condition of centralized and decentralized decision making.The supply chain coordination and optimization are the focus of this paper and further the primary conditions and profit allocation mechanism are proposed.The profit allocation of the difference between the centralization and decentralization is accomplished by the price of wholesale and return.

Key words: reverse supply chain, returns policy, stochastic demand, supply chain coordination and optimization