Abstract: In recent years, the sales of remanufacturing products became the biggest problem with the policy that government encourages recycling used products in order to promote waste resource recycling. In this paper, considering market demand is affected by the sales effort and product price, we built a closed-loop supply chain (CLSC) model with sales effort under the government subsidy. Meanwhile, we discussed the differences of CLSC with retailers’ efforts to sell remanufacturing products about optimal decisions, system members’ profits under government subsidies. The research shows that: Sales effort of retailer will increase product sales proportion and increase aggregate demand in the market. By setting up reasonable subsidies according to the sales effort of retailer, the remanufacturing products sales price decrease and other negative impacts can be solved, the closed-loop supply chain with sales effort under the government subsidy can improve the system and its members in economic benefits.

Key words: government subsidy, sales effort, closed-loop supply chain