Production and Pricing Strategy of Closed-loop Supply Chain Based on Customer Preference

In the closed-loop supply chain systems of recycling and remanufacturing, which are comprised of manufacturers, retailers, and the third-party recyclers, there are niche markets for the co-existence and mutual substitution of new and remanufactured products. The new product production mode, remanufa...

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Bibliographic Details
Published in:Engineering letters 2019-02, Vol.27 (1), p.194
Main Authors: Zhang, Cheng-Tang, Cao, Zong-Hong, Min, Jie, Wang, Miao-Miao
Format: Article
Language:English
Subjects:
Cooperation
Customers
Markets
Niche markets
Pricing
Product development
Production costs
Remanufacturing
Supply chains
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Summary:In the closed-loop supply chain systems of recycling and remanufacturing, which are comprised of manufacturers, retailers, and the third-party recyclers, there are niche markets for the co-existence and mutual substitution of new and remanufactured products. The new product production mode, remanufacturing mode, and hybrid manufacturing mode without cooperation have been separately studied to obtain the equilibrium results under different production modes. The theoretical analysis shows that when customers have different preference coefficients for remanufactured products, different production costs will influence the manufacturer's choice of production mode and product pricing. The analysis also shows that the market demands for remanufactured and new products under the hybrid production mode have a "cannibalization effect" and the remanufactured products with cooperation will be completely bumped out of the market. Finally, an analysis of examples is carried out to further verify the related conclusions.
ISSN:1816-093X
1816-0948