Analysing remanufacturing decisions of supply chain members in uncertainty of consumer preferences

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

11 Scopus Citations
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Author(s)

  • Tong Shu
  • Huaisi Liao
  • Shou Chen
  • Shouyang Wang
  • Kin Keung Lai
  • And 1 others
  • Lu Gan

Related Research Unit(s)

Detail(s)

Original languageEnglish
Pages (from-to)3208-3227
Journal / PublicationApplied Economics
Volume48
Issue number34
Publication statusPublished - 20 Jul 2016

Abstract

This article formulates a gaming model of the closed-loop supply chain with manufacturers (as the leader), sellers and consumers where consumers may or may not be willing to pay remunerative price for remanufactured products vis-à-vis new products. In the model, manufacturers produce new as well as remanufactured products, whereas sellers distribute them. In stable circumstances, this article presents the functional formula of the optimal manufacturing pricing decisions. The results show that when the cost of new products is significantly lower than that of remanufactured ones, manufacturers choose to produce new products only. When the difference between cost of new and remanufactured products is moderate, manufacturers tend to produce both new and remanufactured products, and in some regions, production of new and remanufactured products is proportional to each other. When the difference between cost of new and remanufactured products is enormous, their production and sale tend to stop. Also, this article analyses the effects of varying cost of new and remanufactured products and the recycling rate on pricing decisions of supply chain members. This article contributes to the management of manufacturers’ and sellers’ remanufacturing decisions and also provides advice on how governments can guide consumer preferences.

Research Area(s)

  • closed-loop supply chains, Consumer preferences, gaming model, production pricing decision, remanufacturing, uncertainty of purchase willingness

Citation Format(s)

Analysing remanufacturing decisions of supply chain members in uncertainty of consumer preferences. / Shu, Tong; Liao, Huaisi; Chen, Shou; Wang, Shouyang; Lai, Kin Keung; Gan, Lu.

In: Applied Economics, Vol. 48, No. 34, 20.07.2016, p. 3208-3227.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review