Abstract
The optimal pricing and remanufacturing decisions problem of a fuzzy closed-loop supply chain is considered in this paper. Particularly, there is one manufacturer who has incorporated a remanufacturing process for used products into her original production system, so that she can manufacture a new product directly from raw materials or from collected used products. The manufacturer then sells the new product to two different competitive retailers, respectively, and the two competitive retailers are in charge of deciding the rates of the remanufactured products in their consumers’ demand quantity. The fuzziness is associated with the customer’s demands, the remanufacturing and manufacturing costs, and the collecting scaling parameters of the two retailers. The purpose of this paper is to explore how the manufacturer and the two retailers make their own decisions about wholesale price, retail prices, and the remanufacturing rates in the expected value model. Using game theory and fuzzy theory, we examine each firm’s strategy and explore the role of the manufacturer and the two retailers over three different game scenarios. We get some insights into the economic behavior of firms, which can serve as the basis for empirical study in the future.
Highlights
In recent years, the management of closed-loop supply chains has gained growing attention from both business and academic research because of environmental consciousness, environmental concerns, and stringent environmental laws, for example, the legislation on producer responsibility, requiring companies to take back products from customers and to organize for proper recovery and disposal
The manufacturer sells the new product to two different competitive retailers, respectively, and the two competitive retailers are in charge of deciding the rates of the remanufactured products in their consumers’ demand quantity
Product remanufacturing is the process that restores used products or product parts to an “as good as new” condition, after which they can be resold on the market of new products
Summary
The management of closed-loop supply chains has gained growing attention from both business and academic research because of environmental consciousness, environmental concerns, and stringent environmental laws, for example, the legislation on producer responsibility, requiring companies to take back products from customers and to organize for proper recovery and disposal. One of the important management issues in product manufacturing and remanufacturing closed-loop supply chains is to effectively match demand, and supply by dealing with the uncertainty of the quality and quantities of the collected products and of the market demand. In this paper, we consider a fuzzy manufacturing and remanufacturing closed-loop supply chain with one manufacturer and two competitive retailers; the fuzziness is associated with the consumer demand, the manufacturing and remanufacturing costs of new product, and the collecting cost of the used product.
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