Trade-Old-for-Remanufactured Program: Strategy Selection, Pricing and Coordination

Abstract

Abstract:

In this paper, we investigate the conditions under which a firm should offer a Trade Old for Remanufactured Program (TOR) and how to price and coordinate it. We show that (1) Firms should offer TOR programs only when remanufactured product receptivity and product durability satisfy a certain condition; (2) Improving consumers' environment consciousness, reducing the product durability, enhancing the remanufacturing technology, and implementing government subsidies can promote consumer participations in TOR programs and improve the profits of manufacturers and retailers; (3)The remanufacturing capability, "second-hand" prices and government subsidies plays significant roles in pricing decisions. Finally, to mitigate double marginalization, we apply the revenue-sharing contract to coordinate the TOR closed-loop supply chain and derive the range that the manufacturer and the retailer are willing to cooperate.

Key words: closed-loop supply chain, trade-old-for-remanufactured, pricing, revenue-sharing contract

Han Xiaohua, Zhou Weilang, Shen Ying, Hou Rui. Trade-Old-for-Remanufactured Program: Strategy Selection, Pricing and Coordination[J]. , 2018, 30(1): 177-194.

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