Abstract: This paper designs the premium and penalty mechanisms,establishes seven different decision structure models,and studies the validity of incentive mechanism for leading the collector to increase its collection quantity in five cases. The results show that it is of no effect for the manufacturer offering the collector premium and penalty mechanism;however,the premium mechanism offered by the government to the manufacturer or the collector can coordinate the reverse supply chain. Furthermore,it is as efficient for the government offering the manufacturer premium mechanism as offering the collector the mechanism. The premium and penalty mechanism offered by the government to the manufacturer or the collector can coordinate the reverse supply chain. It is more efficient for the government offering them premium mechanism than the premium and penalty mechanism,sine the former is valid for increasing both the manufacturer and the collector's enthusiasm. The premium and penalty mechanism is similar to the premium mechanism in leading the collector and the manufacturer. The prices are the same under both mechanisms;ho wever,the profit of the manufacturer or the collector from the premium and penalty mechanism decreases, and the decreasing quantity is in proportion to the premium and penalty degree.

Key words: reverse supply chain, coordination, collection, premium and penalty mechanism