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Selection of best buyback strategy for original equipment manufacturer and independent remanufacturer – game theoretic approach

Author

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  • Ankita Ray
  • Arijit De
  • Sandeep Mondal
  • Junwei Wang

Abstract

The study considers two supply chain members, an original equipment manufacturer (OEM) producing new and remanufactured products and an independent remanufacturer (IR) collecting used products of OEM and producing remanufactured products. Furthermore, OEM and IR are involved in competition to collect the used products by providing various exciting offers to the customers. A two period analytical model is developed to investigate the profitable buyback strategy for OEM and IR under low and high pricing strategy. In first period, OEM performs remanufacturing and considers a strategy to collect the product cores from end users under a certain pricing strategy. Under extensive game format, IR joins in the remanufacturing business to compete with OEM and based on OEM's attractive buyback strategy, IR adopts a profitable pricing strategy. The research addresses oligopoly market where OEM is not the single seller of new product and other sellers are interested in remanufacturing. In such scenario, OEM has less control over used products collection of other brand and OEM cannot restrict independent remanufacturer to venture within remanufacturing business. The findings of the study depicted that low pricing strategy “exchange offer” is profitable buyback decision for OEM and “incentive offer” is profitable buyback decision for independent remanufacturer.

Suggested Citation

  • Ankita Ray & Arijit De & Sandeep Mondal & Junwei Wang, 2021. "Selection of best buyback strategy for original equipment manufacturer and independent remanufacturer – game theoretic approach," International Journal of Production Research, Taylor & Francis Journals, vol. 59(18), pages 5495-5524, September.
    • Handle: RePEc:taf:tprsxx:v:59:y:2021:i:18:p:5495-5524
    DOI: 10.1080/00207543.2020.1784486
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    Cited by:

    1. Zhang, Guangxia & Gong, Yeming & Hong, Xianpei, 2022. "Free rider effect of quality information disclosure in remanufacturing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 166(C).
    2. Wojciech Rabiega & Artur Gorzałczyński & Robert Jeszke & Paweł Mzyk & Krystian Szczepański, 2021. "How Long Will Combustion Vehicles Be Used? Polish Transport Sector on the Pathway to Climate Neutrality," Energies, MDPI, vol. 14(23), pages 1-19, November.
    3. Shubham Kumar Singh & Anand Chauhan & Biswajit Sarkar, 2022. "Supply Chain Management of E-Waste for End-of-Life Electronic Products with Reverse Logistics," Mathematics, MDPI, vol. 11(1), pages 1-14, December.
    4. Mao, Huiying & Wang, Wenbin & Liu, Conghu & Xu, Yi & Zhao, Shuiying, 2023. "Effects of the carbon emission quota policy on the quality and sales of manufactured and remanufactured products," International Journal of Production Economics, Elsevier, vol. 266(C).
    5. Yanfei Xia & Quan Guo & Hao Sun & Ke Li & Zongyu Mu, 2022. "Green R&D Financing Strategy in Platform Supply Chain with Data-Driven Marketing," Sustainability, MDPI, vol. 14(15), pages 1-22, July.
    6. Zhou, Tao & Li, Kai, 2024. "Designing manufacturer’s new product technology for a closed-loop supply chain with consumer context effect," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 188(C).
    7. Shushu Xie & Yingxue Zhao & Lin Zhao & Xingyuan He, 2024. "Do Online Reviews Always Incentivise Remanufacturers to Improve Quality in a Competitive Environment?," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 26(67), pages 903-903, August.

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