Abstract
This paper sets two manufacturers on the market. One is traditional manufacturer, which produces new products, and the other remanufactures by recycling used products. Two manufacturers sell products to customers through one retailer and also provide product-related services. Three participators decide prices and service levels independently. We discuss the optimal decision of prices, service levels, demands, and profits in three scenarios: Manufacturers Stackelberg, Retailer Stackelberg, and Nash Equilibrium. We also study the influence of customer acceptance of remanufactured product(θ)on participators’ decisions. With the increase ofθ, new product profit reduces; remanufactured product profit increases at the beginning and then decreases. Retailer profit grows steadily. In Manufacturers Stackelberg, new and remanufactured products can get the maximum profits, and retailer only has the minimum profit. In Retailer Stackelberg, retailer can get the maximum profit; new product only has the minimum profit and remanufactured product has the medium gain. In Nash Equilibrium, new product and retailer have the medium gains, and remanufactured product has the minimum profit.
Highlights
Remanufacturing refers to recovering, decomposing, cleaning, and reproducing the used products and putting them into reuse
We study the influence of customer acceptance of remanufactured product (θ) on participators’ decisions
Its remanufactured products are almost comparable to new products on performance and prices are lower
Summary
Remanufacturing refers to recovering, decomposing, cleaning, and reproducing the used products and putting them into reuse. In USA, remanufacturing industry output value accounts for 0.4% of GDP Other industries, such as printer cartridges, electrical equipment, electronic equipment, and furniture, grow quickly in recent years (Hauser and Lund [1]). With the rise of the remanufacturing industry, traditional companies must pay attention to the change. Their market strategies must be adjusted . Its remanufactured products are almost comparable to new products on performance and prices are lower. Customers should choose between new and remanufactured products based on product information of prices and services. Two companies sell products through one retailer and provide product-related services to customers. We analyze their optimal decisions of prices, services, demands, and profits. We discuss the impact of customer acceptance of remanufactured product on their decisions
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