An Analysis Of Pricing Strategies Based On Game Theory For Remanufacturing Reverse Logistics

With the rapid development of today’s economic, the electronic household appliances is in a high replacement rate, so a large number of products in the end-of-life is being eliminated or discarded by consumers, which result in a waste of resources and environmental pollution. Therefore how to properly recycle and reuse waste materials and create the perfect recycling laws need more and more attention and research at home and abroad. In this paper, some researches based on the recycling and remanufacturing of electronic waste household appliances are carried out as follows:First, we focus on a system which concludes two manufacturers and two recyclers and combine remanufacturing with reverse logistics. This paper establishes a take-back model based on decision variables of the recovery fees which recyclers ask non-profit organization for and the manufacturer’s product price. We solve the sequential game model using backward induction to derive sub-game perfect Nash equilibrium and analyze the best decisions between competing manufacturers and recyclers in monopolistic and competitive take-back schemes. After comparing and analyzing the optimal solution for the decision variables and objective functions, we find that when the degree of substitutability of the products β is relatively low and the economies of scale factors 9 are not very strong, the competitive take-back scheme often accomplishes a win-win situation.Secondly we show a sensitivity analysis on the model parameters, such as the market size of manufacturers a, the economies of scale factors θ, the unit recycling cost in the absence of scale economies η, the revenue charged by the government which each recycler earns from a unit of recycled product r and the remanufacturing rate for recycling waste products σ by the qualitative analysis. This paper analyzes the impact of parameters in model on the optimal decision variables and makes a theoretical foundation for the participants making decisions in model.At last, according to actual situation of China, this paper makes some collection about relevant parameters for Chinese household appliances electronic wastes. We analyze the impact of parameters in model such as the market size of manufacturers α, the economies of scale factors θ, the remanufacturing rate for recycling waste products σ, the degree of substitutability of the products β and collecting rate τ on the optimal decision variables by mathematical methods. This analysis further demonstrates the validity of qualitative analysis in the previous chapter, and it also provides a theoretical basis for the participants making decisions and the government establishing the regulation of take-back scheme for the household appliances.