Durability Decision Of Product Under EPR

The deterioration of environmental problems has prompted people to think about how to more effectively manage environmental issues. Twentieth Century ninety years, the Swedish scientist Professor Thomas put forward the concept of Extended Producer Responsibility(EPR). EPR gives people a new perspective on solving environmental problems. The core idea of EPR lies in that the manufacturer can participate in the entire production cycle of the product, which is responsible for the environmental impact of the product throughout the life cycle and the recovery after the product is discarded. With EPR idea development, more and more enterprises to re-examine key decision variables in the production process and re-make the decision to deal with the introduction of the production extended responsibility laws and regulations. Durable goods production will also be affected by the extended producer responsibility, especially the durability will be reconsidered in the new industrial policy. Based on the classic analysis framework,durable goods production will be divided into three stages:design stage and the second stage of production, the production design stage.The second chapter studies the manufacturer’s decision making problems, while the manufacturer’s the monopoly both in the durable goods market and complementary FMCG market monopoly. In this case, the durability loss independence, two markets influence each other. When the waste treatment cost of durable goods is still in the lower level, the implementation of extended producer responsibility and not makes the durability of durable goods increased significantly. With the continuous improvement of the cost of waste products processing, product durability has a more significant improvement. But for policy makers and the community, it is more necessary to implement EPR. Through example analysis, we can see that in the sales model, the enhancement of the complementarity of the two products will make the durability of the product has a relatively large decline.In the third chapter, the static game between the monopoly in durable goods market and the monopoly in FMCG market is studied. Two manufacturers in this chapter make decision variables at the same time. In the sales model, there is a difference between the durability decision and the previous analysis of durability in the second chapter. With the enhancement of the complementarity of the two products, the durability is reduced and then increased, so in this market structure, the implementation of EPR has a greater positive impact on the treatment of waste products. Because on the one hand the implementation of EPR can directly deal with some of the waste products, another EPR can indirectly promote durable goods manufacturers to improve the durability of its products, and from the source to reduce the generation of waste products. Combined with the analysis of the second chapter, when the cost of waste products is large, the effect of EPR is more obvious, and the social benefit of EPR is more significant. High processing costs means that the environmental impact of waste products is greater, without EPR, manufacturers do not have any motive to be responsible for this, so in this industry,the implementation of EPR is more necessary and effective.The fourth chapter studies the Stackelberg game between durable goods manufacturers and complementary FMCG goods manufacturers. Compared to the third chapter, In this chapter, after the decision of the durable goods manufacturer, the response of FMCG goods manufacturers is made to obtain the best profit. In this chapter, in the sales model, the durability of the product is showing a linear little decrease by the enhancement of the complementary between the two products. Through the analysis of the third and fourth chapters, it can be seen that the durable goods manufacturers can get more economic profits in the lease mode.The fifth chapter studies the durable goods oligopoly competition market. In this chapter, game players make decisions in three stages. This is different with the classical Cournot model. Analysis shows two vendors share market and EPR does not affect the second stage of the production of durable goods. The results of example analysis show that the implementation of extended producer responsibility leads to the decrease of profit. In terms of product output, sales model, the product yield of the first phase has decreased, and the best product durability is 0; In the lease mode, compared with the non implementation of the extended producer responsibility, product output of the first phase increases, and the optimal product durability decreases.The sixth chapter summarizes the full text, and puts forward the future research direction.