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Decision-Making in Remanufacturing Supply Chains: Game Theory Analysis of Recycling Models and Consumer Value Perception

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  • Yingchun Cheng

    (School of Business, Jiangnan University, Wuxi 21400, China)

  • Jianhua Wang

    (School of Business, Jiangnan University, Wuxi 21400, China)

Abstract

In view of the uncertainty regarding consumers’ perceived value of remanufactured products, a remanufacturing supply chain system with the manufacturer as the Stackelberg leader is constructed, in which the manufacturer faces three modes, namely the manufacturer recycling mode (M), the retailer recycling mode (R), and the entrusted third-party recycling mode (3P). The remanufacturing supply chain is analyzed using the game theory approach in these three recycling modes. Using game theory to analyze the optimal pricing and profits of each supply chain participant, we also discuss the impact of consumers’ perceived value uncertainty on the profits of each party under the different recycling modes, and we then explore the selection of recycling channels in the remanufacturing supply chain. The results show that when the perceived value uncertainty is at a medium or low level, retailers are responsible for recycling used products and producing remanufactured products, which brings higher profits to the supply chain system; when the perceived value uncertainty is high, the demand for remanufactured products in the market decreases, and the recycling revenue of remanufactured products is lower. Finally, the validity of the theoretical model is verified by a numerical simulation.

Suggested Citation

  • Yingchun Cheng & Jianhua Wang, 2024. "Decision-Making in Remanufacturing Supply Chains: Game Theory Analysis of Recycling Models and Consumer Value Perception," Sustainability, MDPI, vol. 16(23), pages 1-20, November.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:23:p:10476-:d:1532854
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    References listed on IDEAS

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    1. Yang, Feng & Wang, Manman & Ang, Sheng, 2021. "Optimal remanufacturing decisions in supply chains considering consumers’ anticipated regret and power structures," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 148(C).
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    3. Wei Li & Hang Wu & Liurui Deng, 2015. "Decision-Making Based on Consumers’ Perceived Value in Different Remanufacturing Modes," Discrete Dynamics in Nature and Society, Hindawi, vol. 2015, pages 1-8, February.
    4. Deqing Ma & Jinsong Hu, 2020. "Research on Collaborative Management Strategies of Closed-Loop Supply Chain under the Influence of Big-Data Marketing and Reference Price Effect," Sustainability, MDPI, vol. 12(4), pages 1-23, February.
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