Research Of Government Policy On Automotive Parts Recycling And Remanufacturing With System Dynamics

Recycling and remanufacturing used vehicles and scrapped parts have resource efficiency, environmental efficiency and economic benefits. It is a good solution for the problem of the waste of resources and environmental pollution and it has caused great concern in the international community. As a major country which has big automotive production and consumption, now China is introducing policy measures to guide the auto parts enterprises to actively participate in recycling auto parts remanufacturing. At present, a lot of pilot provinces and cities in China are carrying out the remanufacturing test.This paper uses system dynamics theory and methods to research the effect of government policy on auto parts recycling and remanufacturing. Firstly, it analyses the system of auto parts recycling and remanufacturing and explore the causality of subsystems. Secondly, simulation scenarios are designed for subsidy policy and vehicle scrap policy, the mathematical equations are established between variables and the variables value ranges are set. Finally, Vensim PLE software are used to simulate the key variables like remanufacturing speed, recycling speed, the number of remanufacturers in subsidy policy and vehicle ownership, production speed, recycling speed and replacement quantity in scrap policy. Through analyzing the impact of different policies on recycling and remanufacturing, this paper provides some recommendations for government policy makers as a reference.The simulation result shows that subsidy policy and scrap policy both can promote recycling and remanufacturing activities. Subsidy policy incents remanufacturing activities by improving the number of recycled old parts and remanufacturers. The optimal design for subsidy is:a standard of1million RMB for an initial subsidy, a rate of3,000RMB per unit (used engine) for a recycling subsidy, a stage-increasing R&D subsidy, and a production subsidy with a back slope mechanism. Scrap policy achieves the purpose of increasing demand of parts by adjusting vehicle ownership and the number of maintenance and replacement parts. The government can set reasonable limitation of discarded time to promote the number of recycling and remanufacturing parts.