Research On Jointed Pricing Decision Of Recycling Products

Recycling of used product has great economic value and environmental resource value, and there exist two kinds of main recycling products called remanufactured product and reusing product. Due to the alternative and difference among new product, remanufactured product and reusing product, the pricing and sales volume of one kind of product will influence the pricing and sales volume of other two kinds of product, thus influencing total profits of manufacturer. On one hand, the pricing of recycling product especially reusing product is very chaotic in the enterprise, and there is no normative pricing standard. On the other hand, many kinds of product pursue system of extended producer responsibility in our country under pressure of environment and resource and there are many policies to encourage and support producer. Therefore, this paper is to research how to make decision on jointed pricing of new product, remanufactured product and reusing product under the objective of maximizing consumer’s utility and manufacturer’s profit.At first, we analyze the difference of three kinds of product based on public awareness of environmental protection and degree of product abandoning, thus determining WTP value of three kinds of product. Then this paper solves demand function of three kinds of product using utility theory.Second, this paper divides collection pricing method of used product into pervasive pricing method according to its weight and more reasonable pricing method according to its quality. Based on uncertain demand and uncertain recycling quality of used product, as well as the three-item newsvendor model, this paper respectively builds jointed pricing model of above three kinds of product with the objective of maximizing manufacturer’s profit under two kinds of collection pricing method. Then this paper analyzes the conditions for the solution of the optimal model, creates Lagrange function and solves the model using Karush-Kuhn-Tucker optimal conditions.Finally, the models are optimized and simulated numerically, and then this paper analyzes the effect of demarcation point of remanufacturing and reusing, public awareness of environmental protection and degree of reusing product abandoning on pricing, quality and total profit, as well as compares this two models. The results show that it is more profitable when we use collection pricing method according to used product’s quality, and it also increase consumers welfare.