Optimal pricing decisions with considering the enterprise's remanufacturing technological innovation in a competitive environment

Abstract

Research shows that technology is an important challenge for companies to advance the remanufacturing business. How to make pricing decisions with remanufacturing technological innovation in a competitive environment is the key to improving the efficiency of corporate remanufacturing and reuse of used resources. Therefore, this paper studies the pricing decision-making issues of the manufacturer and the remanufacturer with/without remanufacturing technological innovation in a competitive environment. Our results show that, in the internal competitive environment of the manufacturer, remanufacturing technological innovation does not affect the pricing of new products, but it will affect the demand and thus the profit of the manufacturer. In the environment of the coexistence of internal and external competition of the manufacturer, the manufacturer (remanufacturer)'s implementing remanufacturing technological innovation is the dominant strategy for pricing and profits. In addition, consumers' evaluation of discounts of remanufactured products from the remanufacturer inhibits the manufacturer's profit growth. At the same time, this evaluation does not always bring profit to the remanufacturer. Only if the discount evaluation is at a moderate level, the remanufacturer can be profitable and obtain the optimal profit. This research provides a reference on when to implement remanufacturing technological innovation and on how to invest in remanufacturing technological innovation for manufacturers and remanufacturers.