Abstract
The information technology industry plays an important role in Taiwan’s manufacturing sector, and its total notebook production ranks top in the world. The rapid development of IT products has caused many of these products to be discarded, although most of them can be recycled, remanufactured, and reused. In order to reduce the manufacture of new products and the associated carbon emissions, this study aims to discover the optimal subsidy policy for remanufactured notebooks in the green market, focusing on the pricing of remanufactured notebooks and maximizing manufacturers’ profits while retaining optimal social welfare for consumers. We use a two-stage game theory model to identify the optimal government subsidy policies for a duopoly environment. The results are based on the subsidy ratio between consumer and manufacturers, as this factor is important to the entire green supply chain; manufacturers can still reap optimal profits by only producing new or remanufactured products, and the government should be aware of the likelihood of manufacturers colluding and of the need to intervene when necessary to avoid sacrificing social welfare.
Highlights
As the issue of environmental pollution and global warming becomes more serious, communities all over the world are proposing solutions to ensure environmentally friendly and sustainable development
This study aims to explore the relationships of product substitutability between two manufacturers, consumer market and product evaluation, subsidy allocation, and overall profit of the green supply chain, and the incentives for consumers to purchase remanufactured products
Under the research framework of this study, consumer surplus of remanufactured products is found to have a greater influence on social welfare
Summary
As the issue of environmental pollution and global warming becomes more serious, communities all over the world are proposing solutions to ensure environmentally friendly and sustainable development. Since the turn of the 21st century, developed countries in Europe have been actively promoting environmentally friendly concepts Many new laws, such as the Waste from Electrical and Electronic Equipment (WEEE) Directive and the Restriction of Hazardous Substances in Electrical and Electronic Equipment (RoHS) Directive, have been enacted since 2003, with the aim of utilizing the EU’s huge market to push forth a friendlier environmental agenda within the global manufacturing industries. Many multinational companies, such as Sony, IBM, DELL, and HP, have complied with these directives by mandating their suppliers to adopt the requirements stated. To determine how the difference in subsidy amount will affect the social welfare of the entire green supply chain under various market conditions
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