The Study Of Pricing Strategy And Profit Coordination Of Remanufacturing Closed-Loop Supply Chain Based On WTP Differentiation

Abstract:With the contradiction of economic development and environmental protection have been increasingly growing, circular economy has been paid more attention to. Closed-loop supply chain as a way to achieve circular economy, which makes the material circulate in it, thus makingfull use of natural resources, is of great significance.In real life, the consumer’s willingness to pay new products and remanufactured products (Willingness to pay, WTP) is different, whichmanifests in the consumer’s purchasing decision, thus having a significant impact on remanufacturing decisions made by the manufacturer. The current research on remanufacturing have been mostly built on newand re-manufactured products under the condition of no difference; therefore, it is necessary to make a research on the pricing strategy and coordination mechanism of remanufacturing closed-loop supply chain systembased on the differentiation of WTP. Thisthesis has done some research as follows.(1)On the assumption that new products and remanufacturing products are alike, this study constructs a monopolistic manufacturer and secondary remanufacturing closed-loop supply chain demanding of market, studies and analyzes the optimal pricing strategy of two periods and several periods made by manufacturer. This shows that the cost-saving critical value of remanufacturing plays a key role in helping manufacturer make decisions, who will in the previous period increase the market share at lower price and in the subsequent period enlarge the proportion of remanufacturing products.(2)Considering that the consumer’s willingness to pay new products and remanufactured products (Willingness to pay, WTP) is different, this thesis has studied the optimal pricing strategy of the two cycles and multi-cycle manufacturers based on the differentiation of WTP and comparedthe decision results of two cycle manufacturers under the conditions of no difference and the differentiation of WTP. The research results show that the WTP differentiation have an obvious impact on manufacturer’s decisions. The increase of the remanufacturing cost advantage can effectively improve the efficiency of manufacturers, help enterprises improve remanufacturing technology. In addition, relevant laws and regulations must be strictly formulated and implemented to restrain enterprises to label remanufacture products in order to protect the rights and interests of consumers.(3)Takingthe difference between consumers’willingness to pay (WT P) for new products and remanufacturing products into consideration, the studyestablishes remanufacturing closed-loop supply chain model on the basis of the third party recycling and studies profits of supply chain mem bers and changes of the related parameters under the situation of five deci sion. Then by shapley to distribute the entire remanufacturing closed-loop supply chain which is under centralized decision making system. Finally, solve and analyze the model through the use of numerical simulation. Th e simulation results indicate that centralized decision-making is more effi cient than the decentralized decision making and interest coordination me chanism based on the shapley is benefit to be accepted by each member o f the remanufacturing closed-loop supply chain.