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Optimal Remanufacturing and Pricing Strategies Under Name-Your-Own-Price Auctions and Stochastic Demand

Author

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  • Jianbin Li

    (School of Management, Huazhong University of Science and Technology, Wuhan 430074, P. R. China)

  • Qifei Wang

    (School of Management, Huazhong University of Science and Technology, Wuhan 430074, P. R. China)

  • Hong Yan

    (Department of Logistics and Maritime Studies, Faculty of Business, The Hong Kong Polytechnic University, Hung Hom, Hong Kong)

  • Stuart X. Zhu

    (Department of Operations, Faculty of Economics and Business, University of Groningen, Groningen, The Netherlands)

Abstract

In this paper, we study recycling, remanufacturing, and pricing strategies of a manufacturer in a closed-loop supply chain. Different from traditional list-price transaction, a name-your-own-price auction is introduced into the recycling process where consumers offer a bid for their own used items and the manufacturer decides whether to accept the bid. We first analyze the consumers’ behavior and find that their bids increase with the dealing cost. Next, we build a newsvendor framework to investigate the manufacturer’s optimal manufacturing with pricing strategies and find that the stocking factor influences the recycling quantity and manufacturing policy. Moreover, we find that a larger salvage value motivates the manufacturer to set a higher stocking factor and thus recycle more as well as manufacture new products. We further investigate the effect of the demand uncertain level and the dealing cost on the system.

Suggested Citation

  • Jianbin Li & Qifei Wang & Hong Yan & Stuart X. Zhu, 2016. "Optimal Remanufacturing and Pricing Strategies Under Name-Your-Own-Price Auctions and Stochastic Demand," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 33(01), pages 1-22, February.
    • Handle: RePEc:wsi:apjorx:v:33:y:2016:i:01:n:s0217595916500044
    DOI: 10.1142/S0217595916500044
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    References listed on IDEAS

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    2. Hua Ke & Yong Wu & Hu Huang, 2018. "Competitive Pricing and Remanufacturing Problem in an Uncertain Closed-Loop Supply Chain with Risk-Sensitive Retailers," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 35(01), pages 1-21, February.
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    4. Zhou, Yongyi & Zhang, Yulin & Wahab, M.I.M. & Goh, Mark, 2023. "Channel leadership and performance for a closed-loop supply chain considering competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 175(C).

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