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Remanufacturing Decisions with WTP Discrepancy and Uncertain Quality of Product Returns

Author

Listed:
  • Tong Shu

    (Business School, Hunan University, Changsha 410082, China)

  • Jiajia Xu

    (Business School, Hunan University, Changsha 410082, China)

  • Shou Chen

    (Business School, Hunan University, Changsha 410082, China)

  • Shouyang Wang

    (Academy of Mathematics and System Science, Chinese Academy of Sciences, Beijing 100190, China)

  • Kin Keung Lai

    (International Business School, Shaanxi Normal University, Xi’an 710062, China)

Abstract

In a remanufacturing system, the uncertain quality of the product returns tends to impact the manufacturer’s price of returns and remanufacturing. This article introduces the quality coefficient of waste products on the basis of the analysis of the structure of the remanufacturing cost. It explores the remanufacturing cost function, the recycling price function, and the recycling rate function. In the marketing process, new products compete with remanufactured products. Different consumers show different levels of degrees of acceptance of remanufactured products, contributing to the uncertainty of the willingness to pay for remanufactured products. The price of remanufactured products is always lower than that of new products, allowing price-sensitive consumers to turn to remanufactured products. This shows that product pricing has an impact on the market demand. Considering the difference between consumer willingness to pay and the quality of product returns, this article aims to construct a game model consisting of manufacturers, retailers, and consumers, with the manufacturers as leaders. The optimal pricing decisions of the production in supply chain members have been solved, and sensitivity of the model is analyzed through examples.

Suggested Citation

  • Tong Shu & Jiajia Xu & Shou Chen & Shouyang Wang & Kin Keung Lai, 2018. "Remanufacturing Decisions with WTP Discrepancy and Uncertain Quality of Product Returns," Sustainability, MDPI, vol. 10(7), pages 1-23, June.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:7:p:2123-:d:153775
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    References listed on IDEAS

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    Cited by:

    1. Ming-Liang Li, 2021. "Standardizing Components and Rotating Workers Using GT-Based Algorithm—A Case Study," Sustainability, MDPI, vol. 13(14), pages 1-17, July.
    2. Ehsan Shekarian & Simme Douwe Flapper, 2021. "Analyzing the Structure of Closed-Loop Supply Chains: A Game Theory Perspective," Sustainability, MDPI, vol. 13(3), pages 1-32, January.
    3. Seoyoon Lee & Minjung Kwak, 2020. "Consumer Valuation of Remanufactured Products: A Comparative Study of Product Categories and Business Models," Sustainability, MDPI, vol. 12(18), pages 1-29, September.
    4. Lili Dai & Tong Shu & Shou Chen & Shouyang Wang & Kin Keung Lai, 2020. "CSR Remanufacturing Supply Chains under WTP Differentiation," Sustainability, MDPI, vol. 12(6), pages 1-19, March.
    5. Sadok Turki & Nidhal Rezg, 2018. "Impact of the Quality of Returned-Used Products on the Optimal Design of a Manufacturing/Remanufacturing System under Carbon Emissions Constraints," Sustainability, MDPI, vol. 10(9), pages 1-21, September.

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