Abstract: Based on the incentive compatibility theory, the cost-model of remanufacturing closed-loop supply chain system involving carbon tax and subsidies is studied under the fuzzy market demand and recycled product quality. In order to study fuzzy factors, a fuzzy chance constrained planning method is proposed. As a discrete optimization problem, genetic algorithm (GA) and particle swarm optimization (PSO) are used to seek the approximate optimal solution of an example. The results show that under the fuzzy environment, the total cost changes; only subsidy policies or carbon tax policies are not conducive to reducing costs and carbon emissions; when the government implements both subsidy and carbon tax policies, the recovery rate is improved, and carbon emissions and total costs of the supply chain are also significantly reduced. This study will help enterprises to formulate reasonable production plans in a fuzzy environment, and also help the government to make full use of incentive compatibility theory to guide enterprises to reduce carbon emissions and improve recovery rate and remanufacturing rate.

Key words: fuzzy environment, incentive compatibility theory, fuzzy chance constrained planning, government subsidy, carbon tax, PSO/GA