Research On Remanufacturing Strategies Of The Manufacturer And The Re-manufacturer

With consumers accepting remanufactured products easily and the diffusion of remanufacturing technology widely,more and more original equipment manufacturers(OEM)and independent re-manufacturers(IR)have created business models in which remanufacturing is an integral part.And thus the competition between the new products from OEM and the remanufactured products from IR changed into the competition among the new products,the remanufactured products produced by OEM and the remanufactured products produced by IR.From a practical perspective,in such a complex competition environment,how OEM and IR make remanufacturing decisions to maxize their profit is a very interesting and meanful topic.To our knowledge,although there are plenty of literature studies on the competition between OEM and IR,but only a handful of the literature study the competition among the above three products,moreover these papers ignore the fact that consumers usually have different willingnesses to pay for new products and remanufactured goods.To fill the gap of existing research on remanufacturing,this dissertation studies how OEM and IR make remanufacturing strategies,when taking consumers' heterogeneity of demand for the new products and remanufactured goods into consideration.This dissertation contains three contents.In the first part,we assumed IR engaged in remanufacturing first and studied how OEM and IR made remanufacturing strategies.In the second,OEM engaged in remanufacturing first and studied how OEM and IR made remanufacturing strategies.In the third part,we assumed OEM and IR both engaged in remanufacturing and studied how OEM made remanufacturing pricing decisions.In the first part,we assume IR engaged in remanufacturing first and OEM attempt to compete with IR in the remanufacturing market.Based on the Cournot competition and the consumers' heterogeneous demand,a two-period decision model was developed.The production decision intervals of OEM and the existing IR in duopoly remanufacturing environment were identified.The effect of OEM's remanufacturing strategies on IR was analyzed by comparing with the results in monopoly remanufacturing environment.Our result shows that if OEM does not enter the remanufactured products market,according to the value of the cost savings of remanufacturing,IR has three different production strategies to choose.With OEM'sremanufacturing competition,OEM and IR can choose three different decision strategies,each of that contains six different production strategies with the variation of the remanufacture cost savings and the recovery rate.If there are no remanufactured products in the market and the consumers' demand for new products and remanufacturing exists heterogeneous,IR is more inclined to enter the remanufacturing market than OEM.When the recovery rate exceeds the threshold,OEM is more likely to enter the remanufacturing market with the recovery rate increasing.If more and more consumers accept remanufactured products,the one which collects more used products gains more profits.OEM enters the remanufacturing products market is beneficial to both consumers and society.The government should encourage the development and diffusion of remanufacturing technology and encourage OEM collect more used products.In the second part,we assume OEM engaged in remanufacturing first and IR attempt to compete with OEM in the remanufacturing market.Specifically,according to the cost savings of remanufacture,we studied how OEM and IR determined the scale of new and remanufactured products by developing a two-period model.The conclusions show that OEM and IO can choose 12 different production strategies according with the variation of the remanufacture cost savings.The quantity of OEM's remanufactured products increases with the increase of its cost savings of remanufacturing.When its cost savings of remanufacturing is large enough,in order to obtain more used products for remanufacturing,OEM increases the quantity of the new product in the first period.The quantity of IR's remanufacturing products also increases with the increase of its cost savings of remanufacturing.But when its cost savings of remanufacturing is large enough,the quantity of IR's remanufacturing products is no longer change with the variation of the remanufacturing cost savings.When the cost of new product is very low,OEM is more likely to remanufacture nothing or remanufacture some returned cores and IR is more inclined to remanufacture all cores it collects.Therefore,even OEM and IR have their own patented remanufacturing technologies,OEM still decided the total quantity of the remanufactured products.OEM entering the remanufactured products market is conducive to the development of remanufacturing industry.In the third part,we assumed OEM and IR both engaged in remanufacturing.in this chapter,we derived the inverse demand function when taking consumers' heterogeneity of the demand for new and remanufactured products into cosideration,.The optimal collection rates and optimal prices of OEM and IR were obtained undersimplified and differentiated pricing strategy of manufacturer by establishing a two-period decision model.The result shows that compared with differentiated pricing strategy,if OEM use the simplified pricing strategy,the quantity and the price of new products decrease,and the price of remanufactured products is rising and recovery rate of used products increases which means the total quantity of remanufactured products increases.No matter the change of the remanufacturing cost saving,the degrees of consumer acceptance for remanufactured goods as well as the cost of recycling use products,the profit of OEM and IR under the simplified pricing strategy are higher than those profits under differential pricing strategy.This result suggests that even there is competition in remanufactured product market,OEM uses the simplified pricing strategy will not only benefit itself,but also benefit IR.Therefore,if the remanufactured products and the new products have the same quality and the remanufactured products are not related to safety issues,without providing the remanufactured identifying information for the remanufactured products of OEM will not only be beneficial to OEM and IR but also obtain better social benefits.