Game Models Of Interdependent Third-party Remanufacturing

The problems of resource shortages and environment pollutions have nowadays increasingly intensified throughout the world. Thus the developments of green production and circular economy become urgent. Featured in energy saving and environment protection, remanufacturing enables the efficient use of resources contained in waste products and is an important way of sustainable production, which has therefore received much concern from governments and enterprises. At present, either for lack of remanufacturing infrastructure and professional skills, or for the low marginal profit of remanufactured products, many manufacturers feel reluctant to remanufacture. However, they stop the third-party enterprises privately doing so by means of intellectual property. The conflicts between manufacturer and third-party remanufacturer have greatly harmed the development of remanufacturing industry. By outsourcing remanufacturing and authorization remanufacturing, the above conflicts can be eased and the remanufacturing profits can be shared by both the manufacturer and the third party remanufacturer. Since there have been already plenty of successful cases in the industry, in view of which, based on the exsiting researches, the thesis establishes the game model of manufacturer and third party remanufacturer. Further more, the outsourcing remanufacturing and authorization remanufacturing strategies'impact on such factors as the decision-makings and profits of supply chain members, the consumer surplus, the social welfare and environment is analyzed.Firstly, the game model under outsourcing remanufacturing strategy is constructed, where the remanufacturer is in charge of remanufacturing while the manufacturer plays the marketing function. Based on the model, the thesis analyzes how the ratio of remanufacturing cost and new production version affects the decision making and income of manufacturer and remanufacturer. The supplier being taken into consideration, a game model involving supplier, manufacturer and remanufacturer is built and analyzed. The result shows that when the marginal profit of remanufactured products is low, the supplier stimulates the manufacturer to increase the production of new products and to decrease or even give up outsourcing remanufacturing by reducing the price of parts. But while the marginal profit is fairly high, the supplier raises the price of parts, causing lack of new products, i.e. lack of core for remanufacturing, to result in a lose-lose situation for the supplier and the manufacturer.Secondly, the game model under authorization remanufacturing strategy is constructed. Unlike outsourcing remanufacturing strategy, manufacturer not only permits the third-party remanufacturer to play the remanufacturing producing function but also the remanufacturing marketing function on the condition that the permission fee is charged. In the model, with the manufacturer producing new products, and the third party, remanufactured ones, they compete with each other in some way. However, the manufacturer profits from the remanufactured products via remanufacturer, where they should cooperate. Further research shows that applying the authorization remanufacturing strategy, the manufacturer won't change much of his dicision-making as the emergence of remanufactured products. Unexpectedly, consumers' acceptance of remanufactured products being high, the manufacturer possesses all the profits in remanufacturing maket by raising the patent licensing fees, while the remanufacturer's profits keep the same. Taking the supplier into consideration, rather than the lose-lose situation in outsourcing remanufacturing strategy, a lose-win-win situation is formed, where only the supplier is hurt.Finally, the outsourcing remanufacturing and authorization remanufacturing strategies' impact on such factors as the decision-makings and profits of supply chain members, the consumer surplus, the social welfare and environment is analyzed and compared. The research shows that the outsourcing remanufacturing strategy is always superior to authorization remanufacturing strategie considering the profits of remanufacturer, the consumer surplus and the social welfare. Nevertheless, from the perspective of manufacturer and environment, authorization remanufacturing strategy is better with consumer's low acceptance of remanufactured products; otherwise, the outsourcing remanufacturing strategy is better. In conclusion, the thesis analyzes the advantages and disadvantages of outsourcing remanufacturing stragtegy and authorization remanufacturing strategy from different perspectives, providing theoretic guidance for both enterprise choosing and government encouraging the third party remanufacturing mode.