Pricing And Carbon Emission Reduction Strategies Of The Remanufacturing Closed-loop Supply Chain Under Multi-period Horizon

Entering the 21 st century,how to slow down global warming has become a serious challenge for human beings.In June 30,2015,China made it clear that by 2030 to achieve the unit GDP carbon dioxide emissions decreased by 60%-65% than that in 2005 in the Strengthening the response to climate changes-China’s national autonomous contribution.To achieve this goal,our country has been actively exploring feasible low-carbon policies.Among all,the carbon tax policy is considered to be an effective method to control carbon emission.In the context of countries pay close attention to low carbon,many famous enterprises such as BOSCH,HP,respond positively to the call,joining the carbon emission reduction technology innovation.This paper based on the situation that government levying carbon tax,considering consumers’ different preferences for new and remanufactured products,studies the pricing and emission reduction strategies of the remanufacturing closed-loop supply chain in two-period and multi-period horizon.The main contents and conclusions of this paper are as follows:(1)Construct remanufacturing closed-loop supply chain structure under carbon tax policyThe e Xchange remanufacturing project of B Company mainly involved in automotive diesel injection systems related accessories.The remanufactured products are with the same performance and quality of new products,and enjoy the same warranty as the new product,but the price is lower.Based on the background of this project,assuming the government levying the carbon tax,a single remanufacturer only makes new products in the first period,and increases price which reduces the sales of new products due to the carbon tax.This has negative effects on its profits.Hence the manufacturer needs to adjust production strategies and considers engaged in remanufacturing in the second period.It constructs the two-period and multi-period remanufacturing closed-loop supply chain structure under carbon tax policy.(2)Establish the demand function based on consumers’ remanufacturing preferenceRemanufactured and new products have the same performance and quality.There is mutual substitution between the two products.Consumers perceive product utility difference by trade-off among quality,price,environmental protection and trust,and then make a decision to buy new products and remanufactured products.Therefore,this paper studies the consumers’ buying behavior,assuming consumers having different preferences for new and remanufactured products,denoted by 1 and q respectively,q represents the consumers’ preference for remanufactured products,establishes the demand function based on consumers’ remanufacturing preference.(3)Establish the two-period pricing decisions model of the remanufacturing closed-loop supply chain under the carbon tax policyUnder the carbon tax policy,this paper establishes the two-period production and pricing decisions model which target is to maximize the manufacturer’s profits,and analyzes the impacts of carbon tax on the firm’s manufacturing and remanufacturing production decisions.It finds that there are three remanufacturing cost savings thresholds which define four manufacturing/remanufacturing production strategies.The more carbon emissions saved by the remanufactured products compared with the new products and higher carbon tax,the lower remanufacturing cost savings thresholds.It suggests that increasing carbon tax will stimulate the firm to make more remanufactured products.Further study shows that the emergence of remanufactured products will not affect the price of new products and only decrease the demand for new products.When the carbon emissions of remanufactured products are very low,the market share of new products will be gradually eroded by remanufactured products.Therefore,the manufacturer needs to actively explore how to further reduce the carbon emissions of products.(4)Establish the two-period pricing and emission reduction decisions model of the remanufacturing closed-loop supply chain under the carbon tax policyAssume the manufacturer considers engaged in remanufacturing and invests in carbon emission reduction technology innovation.Consumers’ enhanced environmental protection awareness makes them consider the impacts of products on the environment besides price and quality when buying products.Hence,this paper studies the situation when the firm invests in emission reduction,introduces the demand function which considers the consumers’ low-carbon preference,and establishes the two-period pricing and emission reduction decisions model of the remanufacturing closed-loop supply chain under the carbon tax policy.It finds that there is an optimal emission reduction rate and if the manufacturer invests in carbon emission reduction,the profits are significantly higher than that before reducing carbon emission.And the firm increases the investment in emission reduction on the one hand will increase the sales of both products in the second period,on the other hand reduce the impacts of remanufactured products on the new products.Therefore,under the carbon tax policy,the manufacturer may consider investing in carbon emission reduction to cope with the pressure of the carbon tax.The higher the carbon tax,the more effective to stimulate the firm to invest in emission reduction.However,too high carbon tax will severely curb the manufacturer to engage in remanufacturing.Hence,the government should set a reasonable carbon tax to stimulate the firm to invest in emission reduction and not excessively curb the enthusiasm of the firm to engage in remanufacturing.(5)Establish the multi-period pricing and emission reduction decisions model of the remanufacturing closed-loop supply chain under the carbon tax policyExtend the two-period horizon to the multi-period horizon,the firm enters the normal operation of low-carbon production from the third period and operates continuously to multi-period.Establish multi-period pricing and emission reduction decisions model which target is to maximize the manufacturer’s profits,and analyze the impacts of carbon tax on the long-term operation of the closed-loop supply chain.It finds that the firm investing in emission reduction in the second period has lasting effects and is beneficial to improve its total profits from the long-term perspective.However,the positive effects of emissions reduction are greatest in the second period and late weakened.The shocks of increasing carbon tax on the new products can be offset by reducing carbon emission in the second period,but from long-term perspective,increasing carbon tax will still curb the enthusiasm of firm’s production.